Oil futures rose on Friday

31.07.2020 23:38
Oil futures rose on Friday, and they also rose for the month. The impact factors remain the uncertainty of demand prospects and the expected increase in supply by OPEC+ countries, as they ease production restrictions starting in August.

September WTI crude futures on the NYMEX rose 35 cents, or 0.9%, to $ 40.27 per barrel at the close.

October Brent crude futures on ICE rose 27 cents, or 0.6%, to $ 43.52 per barrel.

For the month, the price of WTI increased by 2.6%, the price of Brent by 5%.

Some analysts believe that the recovery in oil prices from recent lows has returned enough supply to limit potential further price increases.

"Prices have recovered and they are now near the break-even point for many producers - we believe this will encourage producers to return suspended supply and even drill more.

The opportunity to increase oil supply is significant both in the US and abroad. Any increase in prices at current levels is likely to be met with an oversupply. This should keep prices from moving significantly above current levels, " said John Laforge, an analyst at Wells Fargo Investment Institute.

Some analysts expect that the market will experience difficulties with the expected increase in oil production by OPEC+ countries (by 2 million barrels in August).

"Despite the stability and movement in the range of oil prices in recent weeks, the stabilization of global demand and increased production by OPEC+ countries raise the question of whether the market will be able to absorb additional barrels.

Additional barrels continue to find buyers, but the Outlook seems increasingly difficult, and pointing to growth potential for the Norwegian Johan Sverdrup field above 470.000 barrels per day is another obstacle, " said Michael Tran, raw materials analyst at RBC Capital Markets.

Analysts believe that the price of oil was also supported by the decline in the dollar, which is expressed in the price.
The DXY dollar index fell 0.4%, to its lowest in more than two years. For July, the DXY fell by 4% - it is moving to the strongest monthly decline since September 2010.

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