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Crude Oil Bounces on Friday, Heads to Big Weekly Loss

May 5, 2017 at 18:30 by Vladimir Vyun

Crude oil bounced today, following yesterday’s huge slump and today’s drop to the lowest level since November. Still, the commodity is heading to end the week with about 6% loss.

Prices for crude rallied after Adeeb Al-Aama, Saudi Arabia’s OPEC Governor, signaled that production cuts implemented by the Organization of Petroleum Exporting Countries back in November will be likely extended for another six months. He told Reuters:

There’s an emerging consensus among participating countries on the need to extend the production agreement reached last year. Based on today’s data, there’s a growing conviction that a six-month extension may be needed to rebalance the market, but the length of the extension is not firm yet.

OPEC and non-OPEC producers will make a final decision on the matter during the meeting in Vienna on May 25.

Crude dropped earlier as traders were concerned that OPEC output reduction will not be sufficient to rebalance the market as US producers ramp up production, encouraged by rising prices. Experts speculate that simply extending the reduction without deepening cuts will not be enough to eliminate the global glut.

June contract for delivery of WTI crude oil climbed 1.38% to $46.15 per barrel as of 18:23 GMT on NYMEX today. July Brent crude advanced 1.28% to $49.00 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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