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Crude oil prices continue moving down amid rising US yield

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The crude oil prices continue moving down amid rising US yield and despite strong demand in China. The futures on US crude oil with delivery in April were traded at 60.65 USD per barrel, representing a drop of 0.06 USD or 0.1%. The decrease in the Brent variety is slightly larger, as one barrel is traded for 64.47 USD, or a decline of 0.17 USD (0.26%).
The WTI and Brent varieties declined by 2.4% and 1.5%, respectively, since the beginning of this week, reflecting worries about the continuing increase in US production, contributing to rising reserves.
The International Energy Agency’s (IEA) forecasts are the oil extraction in the US to grow to over 11 million barrels per day by the end of 2018, overtaking Russia and becoming world’s largest oil producer.
The increase, as well as the seasonally lower demand, mean that the US crude oil stocks rose by 1.2 million barrels in the week to March 9, making a total of 428 million barrels. As a result, the raw material prices can not return to their peak in January, when Brent was traded for 70 USD per barrel and WTI for nearly 67 USD per barrel.
On this background, the US Goldman Sachs Bank has announced that it is possible a “potentially large increase” in US mining activity over the coming weeks.
The constantly growing US stocks continue to bear a significant negative risk for oil prices. The growth in US production this year outpaces the reduction in oil production of the Organization of Petroleum Producing Countries (OPEC), which began in 2017 in an attempt to push up the low raw material prices.
According to the IEA data, world oil stocks are expected to cross the 100 million barrels per day for the first time in 2018, with demand in turn reaching this figure in the third quarter, a signal for a slightly overwhelming market.
Moody’s rating agency predicts raw material prices to remain in the range of 45-65 USD per barrel in 2019.