Monthly drop in oil could be the strongest since 2008

Oil prices fell again on Thursday, as WTI dropped below US $ 50 a barrel for the first time since September 2017.. and Brent returned to the level of October last year. Since early November, oil has dropped 23% and the monthly decline, according to Reuters, could be the largest since 2008.. when because of The global financial crisis has collapsed in many markets.

Continued supply growth in the United States and Saudi Arabia's statement that the country will not reduce production alone to stabilize the market situation have led to a further decline in prices.

On the eve of the US Energy Information Administration (EIA), the country's commercial oil reserves increased ten weeks in a row, reaching 3.58 million barrels.

The EIA report is "another factor in the bearish market picture," quotes The Wall Street Journal, Caroline Bane, chief economist at Capital Markets, commodity market.

"I am surprised and not surprised by the price drop this morning," said PVM Oil Associates badyst, Tansters Varga. – Surprised, because the stock market has risen sharply yesterday and the dollar has weakened, which should provide support for oil. And not surprised, because the Minister of Energy of Saudi Arabia said yesterday that they are not going to cut [добычу] only and even Putin said that he was satisfied with the price of 60 dollars ".

Russian President Vladimir Putin has called the price of oil at $ 60 a barrel "perfectly acceptable" for Russia. "The price is now balanced and fair," he told the VTB Capital forum "Russia is calling!". Putin also said Russia is ready to continue coordinating with other oil producers around the world, Interfax reported. Representatives of OPEC countries and manufacturers other than those in the agreement, including Russia, will meet next week at a summit, where they will discuss a reduction average daily production of 1 to 1.4 million barrels and perhaps even more, writes Reuters.

On October 3, the price of Brent reached 86.74 dollars per barrel during negotiations and Thursday at 15.30, it was only 59.06 dollars. The fall lasts the eighth consecutive week, the price fell by 31.9%. On October 3, the WTI cost $ 76.9 and Thursday, after falling first to $ 49.75, it then increased slightly – to $ 50.68 (a decrease of 34.1%).

"The current situation of oil prices speaks of two things. The first is that the market does not believe that oil producing countries Here again, the production will be sufficiently reduced and the second is that the situation of the world economy is worse than what we thought on the market, "said Norbert Rücker, head of the department of the European Union. Macroeconomic badysis and raw materials of the bank Julius Baer.