Oil prices fall on signs the market continue to drawn into supplies, with Brent falling below $43 per barrel, first time since 20 April.
Brent futures traded on ICE exchange found support at $42.99 per barrel in Thursday trading.WTI also renewed bottom, falling to $ 41.77 per barrel.
Heavy bearish signal was produced by US Department of Energy reporting that oil reserves in the country rose by 1.67 million barrels last week, while gasoline reserves increased by 452K, hurting refineries. Analysts projected a decline in crude oil inventories by 2million barrels, gasoline – by 700K barrels.
What rises most concerns is that gasoline reserves in the US are growing during the peak of summer driving season which is very unusual for this time of a year, given the fact that the consumption of fuel by motorists is at the highest level in decades.
Stockpiles at biggest US storage hub Cushing in Oklahoma rose to 65.2 million barrels. In addition, oil production in the US grew at the end of the third week in a row, to 8.52 million barrels per day.
Meanwhile, Goldman Sachs analysts point out that the main negative factor for the oil market is not excess fuel but strengthening of the US dollar. The US currency rises in expectations of further divergence in the direction of monetary policy between the United States and other major economies of the world. If the Fed, on the expectations of many experts, will raise its key interest rate until the end of the year, the central banks of Britain, Japan and the euro zone may soon also announce the expansion of stimulus measures.
Investors damped bidding on Dollar after FED stance regarding timeframe of rate hike remained unclear with growing bias for delay. USDX tumbled 1$ to 96.35, partly regaining its position during Thursday trading with uptick to 96.50. Sterling and Euro rose, while emerging market currencies fell.