The price of oil fell yesterday, with Brent dropping to $47.83 per barrel. The price of oil is rebounding Tuesday morning, with Brent up to $48.07 (around +1%). WTI futures with October delivery are going for $44.71 (down by over 2%).
There are many rumors going around the market about the oil market fall on Monday evening. Some believe that sales were provoked by the chief of Rosneft, Igor Sechin, who announced that Russia doesn’t intend to become a member of OPEC. There’s nothing new in this: Moscow never had any plans to do so and such an offer hardly interests the Russians due to the significant differences in the extraction schemes and parameters.
A combination of factors needs to be addressed. Firstly, last night the market was thin due to a lack of American participants (off for Labor Day). Secondly, trade participants are put off by the worsening situation in China with regards to the country’s 2015 GDP. The forecast was dropped to 7.3% from 7.4%. China has already made a comment today about how the period of market turbulence has passed, the yuan is stable and things are on the mend. Oil has become more expensive due to this.
Chinese statistical data bears significance for the commodities’ markets and is due to be out this week; an inflation report being of particular note. In addition, the market is standardly responsive to reports on oil reserves.
Brent will trade $47.90-48.35 today. For the meanwhile, there’s no reason to suppose that we’ll see a real rise in quotes.