Oil: buyers hold defense at $110

On Wednesday, May 18, according to the results of the day, Brent crude oil fell by 2.91%, to $109.38. Oil prices could drop slightly against the background of the US proposal to impose duties on imports of energy resources from the Russian Federation instead of an embargo. The states are interested in such measures to harm Russia and reduce energy revenues.

European Commissioner Paolo Gentiloni on the air of the Rai News 24 TV channel said that the sixth package of anti-Russian sanctions of the European Union (EU) has been blocked. the issue will be discussed again in the last days of the month.

Oil inventories in the US last week decreased by 3.39 million barrels to 420.82 million barrels (the forecast was +1.4 million barrels). Inventories of gasoline decreased by 4.8 million barrels over the week (a decrease of 1.333 million barrels was expected). Distillate inventories rose by 1.2 million barrels (a decline of 0.8 million barrels was expected).

On Thursday, May 19, at auction in Asia, Brent oil costs $110.76. Buyers are still set for continued growth. They expect an increase in demand from China. The authorities of Shanghai are going to gradually lift the coronavirus restrictions in force in the Chinese metropolis. According to various estimates, the townspeople will be able to return to normal life by the end of June.

The rise in oil prices is constrained by the strengthening of the dollar, the collapse of stock markets and the sale of oil from the US strategic reserves. We expect the price to recover to $114.50.