The price of crude oil remains at the level of US $ 50 per barrel amidst the growing issue of production restrictions. However, the decline in stocks of the United States (US) as well as the hope of rising demand in the winter, may be able to support the price of black gold.
Quoting Bloomberg, Friday (21 / October) at 16.00 WIB, the price of WTI oil for December 2016 delivery on the New York Mercantile Exchange rose 0.41 percent to the US $ 50.65 per barrel. In the last week, the price of oil rose 0.17%.
Putu Agus Pransuamitra, Research, and Analyst at PT Monex Investindo Futures explained that oil prices were hit by profit-taking before rising at the weekend.
According to Energy Information Administration (EIA) data, US oil stocks fell 5.2 million barrels last week. This figure is much better than the predicted increase of 2.2 million barrels. US oil stocks are now at their lowest level since January 2016. And, the EIA release caused oil prices to increase 2.4% to the US $ 52.85. Wednesday (19 / October). Market participants are still waiting for clarity on production restrictions, including Russia's willingness to join the plan.
Russian President Vladimir Putin
Russian President Vladimir Putin has pledged to support OPEC's efforts to limit production. However, the largest oil producer in the country, Rosneft, admits that it has the capacity to increase production by 4 million barrels per day if there is demand. Rosneft's statement made the market doubtful again about Russia's desire to cut oil production.
Demand is improving which is clear that the issue of production restrictions will continue to affect oil prices before the OPEC meeting at the end of November. The prospect of further oil prices depends on production restrictions. Deddy Yusuf Siregar, an analyst at PT Asia Tradepoint Futures, is optimistic that oil prices will rebound in the near future.
He saw that throughout last week the price of oil was weakening due to the strengthening of the US dollar index and the release of Baker Hughes, which noted that there were four additional new oil drills in Uncle Sam's country. However, the effect did not make oil prices plummet too deeply, as it was helped by increased demand towards the end of the year and winter.
Deddy said that oil production will decrease in the future. China's production during September 2016 then fell 9.8% compared to the same period in 2015.
"If the OPEC agreement to reduce production is carried out, maybe the oil price could be raised to the US $ 60 per barrel," said Deddy, projecting. In addition to decreasing production, Deddy assessed that the valuation of oil prices is getting better due to increased demand.
Still from China, he believes that the country's economy with a giant wall has the potential to rebound. The industrial production rate only grew 6.1% and was lower than analyst predictions at 6.4%. However, the People's Bank of China noted that there were applications for new loans of 1.22 trillion yuan in September, better than the prediction of only 1 trillion yuan.
Meanwhile, Putu predicts, the oil price will reach the US $ 55 per barrel by the end of the year, the important thing is that the agreement to limit oil production is reached. Moreover, the demand for oil is likely to increase ahead of winter. Technically, Deddy stated, oil prices were already above the 50 moving average (MA), MA 100, and MA 200 tended to strengthen.
Stochastic is also seen in the 54 areas. RSI is in the 59 areas and MACD is in the positive area. In the next week, he predicts, oil prices will strengthen at the US $ 49.20-US $ 52.20 per barrel. Putu's projection is that oil prices will strengthen in the range of US $ 49-US $ 52 per barrel.
Kontan, Page-5, Saturday, Oct 22, 2016
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