Brent below $ 112, due to increase of supply

Technical analysis for crude oil -14 June 2013

Brent crude fell below $ 112 a barrel as oil prices came under pressure due to increased supply of oil, but strong economic data from China limited the losses. The fall in the price of Brent crude 52 cents to $ 111.95 a barrel after increasing more than 1% in the previous session, its highest settlement since October. Light, sweet crude fell 50 cents to 92.62 dollars per barrel.

Fundamental factors

Said Victor Shum adviser oil sector have any. H. S. Purvin & Gertz that given the fundamentals of the oil market, the pricing at the current level grossly exaggerated in the purchase in reference to the weak global economy and the growth of oil production in non-member countries in the Organization of Petroleum Exporting Countries OPEC. He added: In 2013 OPEC may have to limit supplies to make room for an increase in the production of non-member countries in the Organization.

General decline

Oil prices in Asia fell after the adoption of an agreement that allows American to avoid strict austerity measures affecting the demand for oil in the largest consumer of black gold in the world. Shum said the movement after purchase agreement was very large but the decline came corrective.

Supportive factor

On the other side prices benefited from the services sector index rose in China for the third month in a row in December last year by 56.1%. The high monthly purchasing managers index, which tracks the activities of the services sector in China, the latest sign of the possibility of recovery of growth in the second largest oil importer in the world after the slowdown witnessed during most of last year.

According to data from the Federation of Logistics and Purchasing in China, arrived in the index to 55.6% in November last year. The monthly index of manufacturing did not see a change in December from the previous month’s level, where he remained at 50.6%. Analysts expect an increase rate of growth in the new year due to the government’s encouragement of the demand for local products and attempts to transform the economy from dependence has long been on exports. Based index of service sector activity in China on a survey of about 1,200 companies in 27 different areas. The index is considered one of the most important factors affecting oil prices.