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Friday, 22 January 17:03 (GMT -05:00)

Stock and commodities markets

Crude Oil: WTI Prices Drop Below $45/b


The never-ending bearish trend in the global market of crude oil is still underway. Yesterday, at the end of the trading day, the price of WTI crude oil declined below $45 per barrel, Masterforex-V Academy reports.
In particular, at the ned of the American trading session, WTI (West Texas Intermediate) saw a 1.7% drop and broke through the $45/b support on its way down to new local lows. The trading day closed at $44,81/b. Masterforex-V Academy reports that this is the lowest price since March 19th, 2015.








As usual, the biggest bearish driver is the expanding oversupply in the global market of rude oil.
According to the recent report published by Ritterbusch & Associates, the oversupply is really huge and still growing, which creates stronger downward pressure on crude prices.
Brent is also going down in value. Yesterday, the Brent oil futures for September delivery depreciated from $49,72/b down to $48/97/b. At this point, Brent oil is trading around 7-month lows.




Within the scope of yesterday’s trading session, the sales slowed down and the prices started recovering a little bit since the market participants were looking forward to the U.S. crude oil inventories report. However, later on, the sales resumed, thereby pushing the price further down.
At this point, it is clear that OPEC’s policy regarding its oil production volume is currently the biggest bearish driver. Another major factor to consider when expecting a further downtrend in the global market of crude oil is Iran, which is coming back as a major oil exporter, thereby only adding the fuel to the fire. With that said, experts anticipate the highest oversupply of crude oil over the last 30 years.
Yesterday’s U.S. oil inventories figures showed contraction by 4,4 million barrels, which slightly exceeded analyst expectations. However, when considering seasonal adjustment, we may say that such contractions are typical at this time of the year, which lead us to believe that there is no point in considering a new trend. On top of that, despite lower figures, the inventories are still way above the 5-year average.
According to Masterforex-V Academy experts, crude oil is going down in value along with other commodities. The entire picture fits into an alarming trend. At this point, we can see that 18 of 22 components of Bloomberg Commodity Index lost at least 20% of heir value relative to the latest highs. Besides oil, the list of other losers includes nickel, aluminum, coffee, sugar, soybeans, gold and silver etc. This means that the overall bias in the commodity market is bearish.
So far, the experts say the current state of affairs on the global market is very similar to the one seen in October 2008, which brought us the latest global financial crisis following the bankruptcy of Lehman Brothers. With that said, the current situation may seem a wakeup call telling us that another major crisis may be round the corner.



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