Brent dropped below $80 for the first time since the end of March

The price of Brent crude oil dropped below $80 per barrel for the first time since March 31. The current quote of the commodity asset is $79.14 per barrel. North American oil shows similar dynamics: the current price for WTI is $75.81 per barrel. 

Thus, in one day, the oil market lost all the growth observed after the announcement by a number of OPEC+ countries about additional oil production cuts. 

Recall that on April 2, a number of alliance countries, including Saudi Arabia, announced an additional total reduction in production by 1.16 million barrels per day from May to the end of 2023. At the same time, Russia extended its voluntary production reduction by 0.5 million barrels per day also until the end of the year. As a result, oil prices rose from $80 to above $87 per barrel. 

The main pressure on the oil market today is caused by concerns about the recession and the prospects for global oil demand. At the same time, oil prices received some support from the report of the American Petroleum Institute (API) on oil reserves in the United States. According to the data, raw materials stocks decreased by almost 6.1 million barrels per week, gasoline stocks – by 1.9 million, and oil distillate stocks increased by 1.7 million barrels. 

Today, we should pay attention to similar official data from the US Energy Information Administration. If they confirm the statistics from the API, oil will get a good incentive to recover.