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Clashing Fundamentals Result in Sideways Trading for Crude Oil

February 27, 2017 at 22:47 by Vladimir Vyun

Futures for crude oil were almost flat today as clashing fundamentals did not give incentive for prices to go one way or the other. On one hand, high compliance of the OPEC and other producers, including Russia, to the agreement to cut output was a positive surprise to the market. Most analysts did not believe that the participants of the deal would fulfill their obligations, but it appears that such skepticism was not warranted.

On the other hand, concerns about rising supply from the United States did not allow traders to be overly bullish on crude. Energy data provider Genscape reported that oil inventories at the storage hub in Cushing, Oklahoma, increased by 800,00 barrels last week. Additionally, supply from such countries as Iran, Libya and Nigeria, which are exempt from the OPEC output reduction deal, can also weigh on oil prices.

Despite the negative factors, money managers increased their bullish US crude futures and options positions to the record high by February 21 according to the report from the US Commodity Futures Trading Commission.

April future for WTI crude oil ticked up 0.09% to $54.04 per barrel as of 22:26 GMT on NYMEX today. Brent crude declined 0.23% to $55.86 per barrel on ICE.

If you have any questions and comments on the commodities today, use the form below to reply.

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