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Crude Oil Backs Off After Touching Highest Levels for 2019

February 4, 2019 at 18:47 by Vladimir Vyun

Prices for crude oil fell today but only after touching the highest level for the year during the session. Market analysts named several possible reasons for the decline.

The most obvious reason for the drop of oil prices was the growth of US inventories of crude. According to industry data provider Genscape, US crude oil inventories rose by 943,000 barrels at the Cushing, Oklahoma, storage hub last week. The Energy Information Administration will release the official estimate of US oil stockpiles on Wednesday, as usual.

Another reason cited by experts was the report from the US Census Bureau that showed an unexpected drop of factory orders by 0.6% in November. Slowing manufacturing activity in the world’s biggest economy promises lower consumption of oil.

Still, supportive factors for oil, like US sanctions against Venezuela and the OPEC+ production cuts, remain in place. Russian Energy Minister Alexander Novak said today that Russia is fully complying with the output cut deal:

Russia is completely fulfilling its obligations in line with earlier announced plans to gradually cut production by May this year.

According to his statement, Russian output decreased by 47,000 barrels per day in January from October.

Contract for delivery of WTI crude oil in March lost 1.7% of its value to $54.32 per barrel as of 18:27 GMT on NYMEX today. Earlier, it touched the high of $55.75. Brent crude for delivery in April subtracted 0.46% to trade at $62.46 per barrel on ICE after rising to the high of $63.63 intraday.

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