Oil price rises for the fourth consecutive day based on lower US stocks

Mohammed Abdelkhalik
August 5, 2020

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Oil Price Forecast: 5th August 2020

The oil price rose in European Session to continue its increase for a fourth consecutive day, based on the large decline in crude stocks in the United States, according to data from US Petroleum Institute, and online brokers are awaiting official data later in this day, from the weekly report of  US Energy Agency.

American crude oil price rose 0.75% to $ 41.74, from the open level at $ 41.47, and recorded the lowest level at $ 41.47, and Brent crude rose 0.5% to the level of $ 44.54 per barrel from open at $ 44.30, and recorded the lowest level at $ 44.26.

At yesterday’s settlement, US crude rose by 1.7%, and Brent crude futures rose 1.1%, third consecutive daily gain, after strong data on industrial activities in the United States.

In released data, US Petroleum Institute told yesterday a decline in commercial stocks in the country by about 8.6 million barrels in the week ending July 31, in the second weekly decline, exceeding expectations of a drop of 3.0 million barrels.

Oil Price - 16th August 2020

Based on these data, the total commercial inventories in the United States decreased to about 522.7 million barrels, which is the lowest level since the week ending on May 15, in a good sign for the levels of domestic demand in largest consumer of oil in the world.

Later today, dealers awaited official data on commercial stocks and production levels, in the weekly report of the American Energy Agency, and expectations indicate a decrease in stocks by about 3.4 million barrels.

USD fell against most major currencies during Wednesday’s trading and increased its losses in the wake of weak government data that raised concerns about the labour market in the United States.

The number of people infected with Coronavirus worldwide increased to about 18.5 million cases, including 4.8 million cases in America, with concern escalating over the return of closure restrictions.

The United States has contracted to purchase 100 million doses of a promising anti-coronavirus vaccine worth $ 1 billion from Johnson & Johnson.

And government data revealed that the US private sector added 167 thousand jobs last month, which is much less than expectations that indicated adding 1.2 million jobs, and this data comes ahead of the monthly jobs report coming next Friday.

In terms of trading, the dollar index (against a number of major currencies) by 17:23 GMT, fell 0.7% to 92.6 points and recorded the highest level at 93.2 points and the lowest level at 92.5 points.

Author Mohammed Abdelkhalik

Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.