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Crude Oil Falls as OPEC Deal Overshadows US Inventories

October 26, 2016 at 20:03 by Vladimir Vyun

Prices for crude oil fell today despite the surprise decrease of US inventories. The Energy Information Administration reported a drawdown of 0.6 million barrels from the US reserves last week while experts had predicted an increase. That was especially surprising considering that American Petroleum Institute reported a build of 4.8 million prior to the government data.

The likely reason for the commodity’s underperformance is skepticism about the deal to cut oil production proposed by the Organization of Petroleum Exporting Countries. With many OPEC members demanding to be exempt from production cuts, it is questionable if the deal would have any impact on the market even if its came to pass. Another important question is whether Russia joins the measures to support oil prices. So far, the country signaled that it is willing to limit output, but its reduction is out of question.

December futures for delivery of WTI crude oil dropped 1.62% to $49.15 per barrel as of 19:51 GMT on NYMEX today. Brent crude declined 1.82% on ICE.

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

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