Crude oil broke the longest gain since February 2019
In the course of trading on Friday oil prices significantly reduced on the negative signals from China, the investor sentiment is also affected by the increasing tensions between Washington and Beijing.
The cost of July futures for Brent crude on the London ICE Futures exchange to 18:15 MSK was $34,55 per barrel, or $1,51 (4.19 percent) is below the price of closing of previous session. For the week Brent can add more than 5%, according to MarketWatch.
Futures for WTI crude oil for July in electronic trading on the new York Mercantile exchange (NYMEX) by this time, fell $1,19 (3,51%) to $of 32.73 per barrel. On Thursday, the contract rose for the sixth trading session in a row, which became the most sustained growth since February 2019, according to data from Dow Jones Market Data.
“Although the support of the oil can have a weakening of quarantine measures, the upward trend is limited by concerns of slowing global economic growth and global tensions,” – said FXTM analyst Lukman Otunga, quoted by MarketWatch.
Premier of China Li Keqiang said on the opening Friday of the annual session of vsekitajsky meeting of national representatives (vsnp) that the country for the first time since 1994, has decided not to set a target of annual GDP growth.
China’s decision is due to the fact that “the country is faced with factors which are difficult to predict”, including in the aftermath of the coronavirus, as well as uncertainty in trade. This decision is a negative factor for the world, given that China has long been the main engine of global growth, experts say.
Meanwhile, American senators have prepared a bill providing for sanctions against Chinese officials and organizations that monitor compliance with laws on national security in Hong Kong, and introducing penalties for banks that conduct business with these organizations.
A new national security bill to Hong Kong, which was included in the agenda of the NPC session, provides for a ban on separatist activities and terrorism and external interference.
In addition, the mood of traders is affected by the uncertainty over lifting of quarantine measures in the world against the background of misgiving to second wave of coronavirus, says S&P Global Platts.
“Oil prices will continue sensitive to any signs that the weakening of quarantine measures may lead to the second wave COVID-19 and thus exert a prolonged impact on demand,” the analyst notes AxiCorp Stephen Innes.
Meanwhile, the production of oil with condensate in Russia continued to decline in may, according to statistics seen by “Interfax”. Average daily production in that month was almost 17% lower than the same level of April and totaled 1284,1 thousand tons of oil and condensate. Overall, on 21 may, the production level was the lowest since the beginning of may – 1275,9 thousand tons.