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Crude Oil Drops as Skepticism About OPEC Deal Returns

October 28, 2016 at 19:13 by Vladimir Vyun

Doubts about the OPEC deal took hold of the markets again, driving prices for crude oil down during the Friday’s session. The Organization of Petroleum Exporting Countries proposed an idea of reducing output to support prices. The traders’ sentiment about the deal is swinging between optimism and pessimism, and so happened that pessimists prevailed today. OPEC members are meeting in Vienna today to discuss details of the planned production curbs. Meanwhile, Russian President Vladimir Putin is meeting with domestic oil producers to discuss a potential cap or even reduction. Russia was the most vocal non-OPEC producer supporting the idea of supply limit.

The market basically ignored oil rigs data from Baker Hughes, which should have been helpful to the commodity. Baker Hughes reported that the number of US oil rigs fell by 2 this week. The drop followed 17 consecutive weekly increases.

Futures for delivery of crude oil in December dropped as much as 1.89% to $48.78 per barrel as of 19:02 GMT on NYMEX today. Contract for Brent crude declined 1.33% to $49.80 per ICE.

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