24.12.2014 - Drop of oil has stopped, but the negative trend is saved
The price of Light Sweet crude oil continues to consolidate within the local sideways trend after the decline stopped. The reason for the sharp rise in share price yesterday was the data on the growth of world's largest economy by 5.0% in the 3rd quarter of this year. It should be noted that despite this, the oversupply of oil on the market continues to put pressure on the quotes of raw materials. We recall that the OPEC countries have refused to reduce the oil production quotas. Lower oil prices will negatively affect the activity of drilling in North America, where continues an increase in volumes of oil production. Stopping a number of projects in Russia, is also a cause for further slowdown in production in the world. Given these factors and the weakening demand in Europe and Asia, we maintain a medium-term negative outlook on oil and recommend holding short positions with the target around 50 dollars per barrel.