TEMPO.CO, Jakarta - Crude oil prices depreciated one again on Saturday, April 30, 2016, ending a four-week uptrend that was caused by the depreciation of the US Dollar.
Experts are saying, the depreciation of crude oil prices are caused by profit-taking by short-term commodities broker - who were looking to profit from its' recent gains.
June contracts for the US benchmark, the West Texas Intermediate (WTI) went down by 11 cents to conclude trading at US$45,92 per barrel at the New York Mercantile Exchange - while in London, June contracts for the European benchmark, the Brent North Sea oil, also slipped, albeit only by one cent to close trading at US$48,13 per barrel.
In the week prior to the depreciation, WTI prices had climbed by 5.0 percent, while the Brent went up by 6.7 percent. As such, the appreciation of both commodities had almost reached around 20 percent in April - the highest appreciation observed in 2016.
"The amount we have in reserves is still the most important factor - and the rallies we had saw came from the hope that the surplus would decline towards the end of the year," said an analyst for Again Capital, John Kilduff.
Another sentiment that is affecting the general movement of the global market during the weekend is the signal sent out by the Federal Reserve Bank of America, whose Governor - Janet Yellen - said on Wednesday, April 27, 2016, that it would not rush to raise its' Fund rate. Immediately following Yellen's statement, the Bank of Japan said that it would reject proposals for any further stimulus, which has caused the value of Japanese Yen to soar - hurting its' economy.
On a side note, the US Dollar's depreciation means that crude-oil prices - which is priced in US Dollar - will be cheaper to buy. "The drop in the us [crude oil] output and the depreciation of the US Dollar is an incentive for commodities brokers and investors - while a continued amount of globa [crude oil] surplus and the record high oil crude oil surplus in the US will not improve the global predicament," according to an analysis by Commerzbank.
ANTARA