26.07.201900:44 Forex Analysis & Reviews: Oil is growing, but for a serious breakthrough you need something more positive

Oil has enough reason to grow. Quotes have already risen by more than a dollar amid tensions in the Middle East and a significant decline in US oil reserves. On the opposite side of the scale, only weak production data in Western countries, indicating a slowdown in economic growth, which, in turn, may reduce the demand for fuel. Brent crude went up by $1.03, to $64.21 per barrel, while American WTI rose by $1, to $56.88 per barrel. A week after Iran captured a British-flagged tanker in the Persian Gulf, the British Ministry of Defense announced that the Royal Navy was assigned to escort ships through the Strait of Hormuz to protect the freedom of navigation. Saudi Arabia, the world's largest exporter of oil, also called for ensuring the safe transportation of energy in the Strait of Hormuz, through which about 20% of world supplies are transported daily. Prices also supported the decline in oil reserves in the US by almost 11 million barrels, despite the fact that a decline of 4 million barrels was expected. The numbers indicate that the oil market is finally recovering.

Confirming the balance of supply and demand, Brent briefly plunged into contango - this is a market structure in which the prices for forward deliveries are higher than for urgent ones. However, this is not enough. "Despite the fundamental factors that support oil prices, such as the balance of supply and demand, geopolitics, on the side of bulls, the market, in order to rise noticeably, you still need a strong positive economic catalyst. If next week we receive positive comments on the results of the resumed trade negotiations between the United States and China, then oil may jump sharply in price," BNP is sure.