The price of oil closed last week with a drop of more than 6%, which left Brent crude, a reference in Europe, at 83.8 dollars, and West Texas, a reference in the United States, at 78 dollars caused by a slowdown in fears of conflict in the Middle East.
The drop in prices below the 80 dollar threshold puts oil on the brink of the abyss due to the geopolitical context in the Middle East and the impact that this scenario could have on the supply and demand for Brent in the market, according to analysts heard by the newspaper “El Economista”.
The price of oil closed last week with a drop of more than 6%, which left crude, a reference in Europe, at 83.8 dollars, and West Texas, a reference in the United States, at 78 dollars, caused by a slowdown on fears of conflict in the Middle East.
“The 6% drop in the price of Brent crude last week was due, in part, to the easing of fears that an escalation of hostilities in the Middle East could endanger oil supplies. Geopolitics in that region will continue to be the focus of attention in the oil markets over the next two months”, points out Capital Economics.
Something that all analysts agree on is that in recent weeks the price of oil has been under pressure. “It seems that political developments in the Middle East determine short-term trends”, say Carsten Fritsch and Barbara Lambrecht, economists at Commerzbank.
However, those responsible assume that it is a “mistake” to analyze the drops in the price of oil, just because of the geopolitical context. Technical analysis indicates that oil is close to the abyss, which can act as support and avoid further falls, but new oil accumulation data stock can lead to oil giving up several dollars at once.
Furthermore, data released last week by the United States Energy Information Administration indicate that the stock Commercial crude oil, excluding the Strategic Petroleum Reserve, increased by 7.3 million barrels to 460.9 million barrels in the week ending April 26.
Rising oil reserves are usually a sign of further declines in the price of crude oil, given that the more crude oil accumulates in storage tanks, the less crude oil needs to be extracted in the coming weeks to produce gasoline or diesel.
