Report: OPEC's positive decision may trigger a sharp reduction in oil price

Baku. 28 March. REPORT.AZ/ Brent and WTI futures increased by more than 1% since the beginning of the week.

Report informs, Brent crude oil, which in the last two trading sessions, fell by 6.2% - to 39.22 USD / barrel, now sold at 41.5 USD / barrel.A sharp drop in oil prices in last week explained by their growth by almost 50% over the previous two months.

Data on the number of active rigs traditionally published by the American company Baker Hughes has led to sales of oil at a price above 40 USD / barrel.So, on March 18-25 the number of active drilling rigs decreased by 15 units or 3.9% - up to 372 units. Thus, since the beginning of 2016 more than 150 units have been decommissioned.

According to the weekly Commodity Futures Trading Commission, the growth of oil over the last 7 weeks is not due to the opening of long positions but closing of open short positions previously.

Report informs, the most important news for the market will be meeting of OPEC countries and states that are not in the cartel in April.While only Libya and Iran have not specified their presence at the summit.

Analytical Group of Report believes even in case of positive outcome of the meeting, the parties agree to a reduction in production volumes, increase in oil prices is not expected in the long term:

"If the price of oil will reach 50 USD / barrel, the number of active rigs in the United States will increase, which again will lead to a sharp drop in oil prices. The summit participants approach to the issue very cautious, fearing that American companies will take their niche in the market. Therefore, a positive outcome from April summit is not expected. Most likely, after the summit price of oil will be reduced to 30 USD/barrel."