REUTERS
Oil prices are falling, with the price of the US benchmark WTI reaching a six-year low of $54.18 a barrel due to the strengthening of the dollar and reduction of storage capacity in the world.
Brent futures fell by $0.49, to $54.18 a barrel on Monday, while futures for WTI were down by $0.63 to $44.21, having previously hit the lowest level since March 2009 of $43.57, according to Reuters.
China is taking advantage of low prices to replenish its strategic reserves, thus increasing imports to record high levels despite the economic slowdown, but analysts say new storage capacity will be available only after several months.
"Although the reserves [in China] are likely to grow due to the low prices, the replenishment of strategic stocks will be thwarted by a lack of storage capacity. However imports may rise a few months before the opening of a new warehouse for strategic reserves," said FGE analyst Wendy Yong.
Analysts also note the replenishment of the oil storage facilities in the United States.
"Investor sentiments were influenced by the forecast of the International Energy Agency that the U.S. may completely fill up its storage facilities, and the assumption that the global production in February increased by 1.3 million barrels per day as compared to the previous year - to 94 million barrels," according to an ANZ report.
A report from Morgan Stanley says that U.S. oil companies are to resume production at wells that were previously shut down due to cold weather. According to Goldman Sachs, the reduction in the number of active drilling rigs in the United States will cause only a slight decrease in production in the second quarter.
The market is also affected by stronger dollar: The euro in Asia trading has fallen to its lowest level since January 2003 – to $1.0457.