A new weekly decline for oil… Expectations are still positive 2021-04-11T17:20:28 A new weekly decline for oil… Expectations are still positive A new weekly decline for oil: This week is an unhappy one for global oil goods, as the price of black gold badly fell to a range of 2%- 3%this week. Although it has declined again this week, it remains better than trading in mid-March. Brent crude fell by 2.94% compared to last week’s closing, to record $ 62.95 for a barrel. Meanwhile, West Texas Intermediate crude collapsed by 3.74% to reach $ 59.32 a barrel this week. In fact, the oil price has a chance of strengthening because the previously strong dollar is losing its strength and wreaking havoc now. The price of black gold tends to retreat when the US dollar rises, and vice versa. At the same time, there are other sentiments that are weighing on crude oil prices, as US crude inventories decreased by 3.5 million barrels last week, while gasoline inventories jumped to 4 million barrels to reach 230 million barrels, according to data from the United States Energy Information Administration. An increase in gasoline inventories in the United States was in line with an increase in refinery activity prior to the summer driving season. Detailed weekly harvest Global oil prices retreated by more than 4% on April 5, as the Organisation of Petroleum Exporting Countries (OPEC) and its allies, also known as OPEC +, will increase production. In addition, the risk of a new wave of Covid-19 infections, obscure signs of strong economic recovery in the United States. At the following session (April 6), global oil prices increased by 1% thanks to positive economic data from China and the United States to compensate for some deep declines at the first session of the week. The US services industry’s activity The latest reports showed that the US services industry’s activity hit a high record in March. During the same period, China’s services sector strongly expanded, as sales grew faster during the last three months. Oil prices continued to rise at the session of April 7, but upward momentum faced many obstacles. In particular, gasoline inventories in the United States rose and fears of the new Covid-19 virus may lead to disabled energy demand. At the April 8 session, the market was less volatile. Crude oil prices were struggling to find a trend as the pressure of the Covid-19 pandemic in the short term was limited by weaknesses of the dollar. Global oil prices By the end of April 9, concerns regarding increased supply and weak demand continued to strain global oil prices, in the context of increasing world casualties, particularly in Europe, Brazil and India. At the end of this session, the price of North Sea Brent oil fell by 25 cents, or 0.4%, to trade at $ 62.95 a barrel. Meanwhile, the price of US light crude oil of West Texas Intermediate fell by 28 cents, or 0.5%, and closed at $ 59.32 a barrel. Over the entire week, the price of Brent oil decreased by 2.9%, while West Texas Intermediate crude lost 3.5%. Factors that don’t support oil… Positive forecast of analysts It is assumed that the return of OPEC + supplies to the market amid an increase in Covid-19’s infections, will continue to hamper oil prices. Development also raises fears of flexibility in energy demand. Now, much confidence in the market depends on assumptions that oil demand will strongly rebound in the second half of this year. Virus infection in highly populated countries such as India and Brazil will increase the possibility of countries to adopt further strict actions and reduce fuel consumption, which is a burden for oil prices, and it will take some time to vaccinate all populations and allow economic and tourism activities to open. Despite this, some analysts expect an increase in oil demand in summer, as the price of Brent crude oil is likely to rise to $ 66 a barrel during this quarter. OPEC Although OPEC + has violated most of the expectations of investors and observers, the market now indicates that they accept this move and they are also ready to take advantage of stability. According to the agreement reached on April 1st, OPEC + will increase its monthly production during the period from May to July 2021. This means that OPEC + will only reduce more than 6.5 million barrels of oil a day as for May, compared to a previous decline of 7 million barrels a day. Saudi Arabia voluntarily reduced another 1 million barrels. Meanwhile, OPEC member Iran is exempt from voluntary cuts, which will also increase the supply of “black gold”. For its part, Russia estimates that the impact of the epidemic on oil consumption may continue until 2023-2024. While demand remains weak because of the epidemic, market supply is likely to increase in line with increasing proportion by producers. Iranian oil Data intelligence company Kpler announced that US-Iran negotiations have an opportunity to increase the supply of oil by 2 million barrels a day in the market. If that were to happen, it would mean more pressure for crude oil, as it could complement the downward process to which it is now violently exposed. On other hand, the International Monetary Fund has increased its economic expectations for this year. Gita Gopinath, chief economist at IMF said that global economic growth is expected to record 6% up from the previous estimate of 5.5%. If global GDP grew by 6%, this would be the best record since 1973. More steady economic activity is also expected to increase demand for fuel species such as oil to be able to raise prices However, an increase in Covid-19’s infections in the United States, which accounts for more than half of Corona-related deaths last week, will limit the rising of black gold prices.