Last week the world prices for oil and oil products has grown after a sharp downward correction in the result of a Brexit. Support to the market was rendered by decrease in production and oil reserves in the United States, the oil strike in Norway, as well as the gradual return of the oil market to a balanced state.
As a result, the WTI rose to $50, while prices for Brent tested the level of $51 and 43. The spread between grades of oil as at 30 June 2016 widened to us $1.35, the ratio of the spread to the price of WTI rose to 2.8%.
In addition, the markets are in a mild state of euphoria on the background of statements by regulators about the possible expansion of programs to stimulate the economy. The Bank of England has announced the plan to continue the incentive programs in order to mitigate the effect of Brexit. Reports of a possible increase of stimulus programs announced by the ECB and the Bank of Japan, the U.S. Federal reserve hinted at a possible pause of interest rate hike.
In the course of the meeting Minister of energy of Saudi Arabia with Minister of energy of the USA on the sidelines of the G20 in Beijing has heard assurances from the Saudis about the possibility of reaching the global oil market balance of supply and demand in 2017. Saudi Arabia maintains spare capacity, and intends, in the framework of OPEC respond to a rise in short-term needs, reducing the possible deficit in the oil market.
According to Reuters, oil production in OPEC countries in June 2016 rose 0.8% on a monthly basis to 32.82 million bar. a day. Growth was observed in all countries, with the exception of falling production in Venezuela and Iraq.
Oil production in Iran reached 3.6 million bar. per day, extraction in Saudi Arabia amounted to 10.3 million bar. a day. The export of oil from Iran in June 2016 made up 2.31 million bar. per day, exports in July is estimated at 2.14 million bar. a day. Iran sent the first postcyclone period, the tanker oil to the Polish port of Gdansk.
Oil exports from southern ports of Iraq in June 2016 amounted to 3,175 million bar. a day compared to 3.2 million bar. per day exported in may 2016, the Exports from Iraqi Kurdistan is estimated at 480 thousand. a day. The decline in exports associated with the growth of domestic consumption of oil for electricity production in the summer.
Total reserves of oil and oil products in the United States on June 24, 2016 fell by 1.0% and amounted to 2066,9 million bar. a day. Crude oil inventories last week fell more than expected by 4.1% compared to the same date last year, gasoline stocks grew by 1.4%, distillate inventories decreased by 1.8%. According to the US Department of energy, the overall demand for oil and petroleum products continues to grow.
As at 24 June 2016 the oil reserves in Cushing amounted to 64,2 mln bar. versus 65.2 million bar. the week before last, and 56.4 million bar. a year ago. Stocks in the strategic reserve have not changed and are 695,1 million bar.
According to Baker Hughes, as of June 24, 2016, the number of oil wells in the US declined by 7 units to the previous week and amounted to 330 units vs. 628 units at the same date in 2015.
According to NRDC, production of crude oil in China in may 2016 fell by 7.4% yoy to 16.76 million tonnes. Crude oil production for 5 months. 2016 decreased by 4% compared to the same period 2015 to 84,19 million tons.
The internal processing of oil in January-may 2016 rose 9.8% over the same period of 2015 through 214,33 million tons. Production of light oil products grew by 8% to of 133.33 million tons, consumption of petroleum products grew by 3.5% to 118,51 million tons.
According to METI, the crude oil import to Japan in may 2016 rose 0.6% yoy to 3.32 mn bar. a day.
the <strong>Oksana Lukicheva, analyst of commodity markets "Opening Broker"</strong>