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After 6% Decline, Oil Price Is Still Unstable

by Didimax Team

The price of crude oil globally was looked unstable in the market. That could be seen along the Asian session at the beginning of this week. The cause is a world economic slowdown risk. 

However, the price of this commodity is still supported by the tight stocks condition. When this News was written the Brent noted it’s position. It was around the level of $113.09 per barrel. 

It can be noted that this product was 0.04 percent weaker than it’s position before. In the other places, West Texas Intermediate also has the same trend oil market. 

That product was around the level of $109.44 per barrel. Before, this commodity pricd has been slumped up to six percent. This situation occured last meal ahead of the risk off sentiment made by global investors. 

 

The Rising Inflation Happened in Many Countries

There is a strong cause that triggers this global economy slowdown. The biggest trigger is for sure the rising inflation which can be found in so many countries in the world. 

However, catalyst is still supported the price of oil. That catalyst is actually the sanction from Wes countries to Russia. It is because they thought that there is a possibility to reduce the oil stocks.

Besides that, OPEC + also made a decision to increase their daily output at the beginning of next July. However, the decision like that is not predicted by so many market participants. 

This decision also fail to handle any concerns Of the markets due to stocks tightening in the energy trading. That is why; it seems that the institution needs to find another right solution for everything.

Some Members Fail to Raise the Output

What is happened now is that several members of OPEC failed to face this challenge. It is especially to Raise the output. The reason is a blockage done by the rebel groups. 

Mohamed Oun who is known as the Minister of Energy in Libya said something. He stated that the normal output of oil must be around 700 thousand barrels in one day. However, that was not happened. 

The blockage appeared was disturbing everything. It made the current output is just around 100 up to 150 thousand only. That amount is for sure quite far from the normal numbers recommended. 

For this time, any disturbance for this commodity a little bit able to handle the concerns about demand weakening prospect. That weakened demand caused by the global economy slowdown. 

The Major Catalyst is Still from a Fundamental Factor 

So far, the major catalyst which affects the price of oil is fundamental factor. It was just like what an analyst said in a moment of interview done with a media. 

Separately, Baker Hughes Co as a Energy Service Comoany from the United States released their newest report. That report showed the 7 rig increase to become 740.

The huge increase like that happened last week. For your information, this report is crucial because it becomes an Initial indicator of oil production in America. 

That is especially for several months ahead. However, in this nowadays context, the USA rig increase is actually not that significant. The reason is that it is only used to cover the soared demands in this summer. 

The Stocks May Reach the Lowest Level 

Due to that situation, some analysts then expressed their opinions. One of them said that the stocks of oil may reach it’s lowest level in 40 years period. The amount is around 356 million barrel. 

That prediction may happen in October this year. The situation like that can occur if the United States of America still maintains their speed like this. 

That is why; market participants are waiting for the further actions that will be taken by many parties in this case. The examples are USA , OPEC, and many more again. 

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