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Crude Oil Falls as US Drillers Continues to Expand Number of Rigs

January 31, 2017 at 1:49 by Vladimir Vyun

Futures for crude oil fell on Monday and remained under pressure on Tuesday amid persisting concerns that US supply will counter any production cuts that the Organization of Petroleum Exporting Countries is going to make. Lat year, the OPEC and some non-OPEC producers, including Russia, agreed to reduce output as a measure for supporting oil prices. So far, it looks like the organization managed to convince markets that it is going to make good on its promise. In fact, money managers increased their long positions on US crude to a record according to the Commodity Futures Trading Commission.

Yet futures did not reflect such optimism. Baker Hughes reported on Friday that the number of US oil rigs rose to the highest level in more than a year, fueling fears that increasing US oil production will prevent the OPEC from bringing supply and demand closer to balance.

Contract for delivery of WTI crude oil in March rose a little bit by 0.04% to $52.65 per barrel as of 1:16 GMT on NYMEX today after falling 1% yesterday. Futures for Brent crude declined 0.52% to $55.23 per barrel on ICE.

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