While oil has managed to recover a bulk of losses by the end of the previous week, downbeat moods returned at the beginning of a new week. A drop is reasoned with the same factors that led to a sell-off at the beginning of a previous week. Lack of agreement between the United Arab Emirates and Saudi Arabia creates a risk of the UAE abandoning the supply cut agreement altogether. This in turn could encourage other OPEC member countries to do the same. Saudi Arabia wants production to be gradually restored, especially as new virus variants threaten demand outlook once again. Moreover, China imports decline as the country attempts to limit upward pressure on prices. China has accumulated massive oil stockpiles during the pandemic. Interestingly, word on the street is that the upcoming DOE report will show flat week-over-week change in oil stockpiles, what may be a surprise following large draws in recent weeks.
Oil is moving lower today in spite of a rebound on EURUSD market. Increased supply from OPEC members as well as pandemic uncertainty are main factors driving oil prices now. Source: xStation5
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile appThis content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
