Azernews.Az

By Nigar Abbasova

Oil prices demonstrated negative dynamics on August 4, as concerns about oversupply in the market again came to the foreground, Ria Novosti reported.

Global benchmark Brent crude oil October futures were trading at $42.56 per barrel facing a decrease by 1.25 percent. West Texas Intermediate (WTI) crude September futures were at $40.48 per barrel, facing an increase of 0.88 percent.

The price of OPEC basket of fourteen crudes stood at $38.43 a barrel on August 3, as compared with $38.29 the previous day.

Earlier, positive dynamics was fixed in oil prices. The growth was triggered by the data issued by the U.S. Energy Department on the considerable reduction in petroleum reserves.

U.S. Energy Department recently announced that the commercial reserves of oil in the country have increased by 1.4 million barrels to 522.5 million barrels, while analysts expected the figure to stand at 1.363 million. Nevertheless, the attention of investors was drawn to the data on petroleum reserves, which reduced by 3.3 million barrels to 238.2 million barrels, while expectation of analysts was 0.2 million barrels. The reduction of petroleum reserves has lightened concerns over the excess supply of petroleum in the market. Moreover, oil extraction in the United States has also decreased by 55,000 barrels to 8.46 million barrels per day. Oil reserves in the U.S. largest Cushing terminal has also decreased by 1.1 million barrels to 64.1 million barrels.

Nevertheless, analysts say cautions about the global excess of raw materials and activation of the operations of oil companies still exert pressure on the market.

The cost of the black gold also influences the rate of the U.S. dollar as oil prices are pegged to the currency. Meanwhile, the rate of the U.S. dollar weakened against the euro and the British pound as a result of trading on FOREX currency market on August 3.

The index of the U.S. dollar against the six leading world currencies has decreased by 0.7 percent, thus hitting its bottom-low level in the last five weeks.

Earlier, FRS, the central banking system of the United States, opted to keep rates between 0.25 percent and 0.5 percent. This was the fifth consecutive meeting, in which Federal Oil Market Committee (FOMC) left the rates unchanged.

--

Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz