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Crude Oil Falls on Expectations of Higher Supply

May 15, 2013 at 0:47 by Vladimir Vyun

Crude oil rose today, but remains near the lowest level in two weeks after yesterday’s drop. The decline was caused by anticipation of growing US crude oil inventories and increasing supply from the Organization of Petroleum Exporting Countries.

American Petroleum Institute reported that US stockpiles of crude grew 1.1 percent last week. Market participants expect that today’s report from the Energy Information Administration will show an increase by 450,000 barrels. The International Energy Agency predicted that OPEC output will climb to 7.18 million barrels per day in 2015 from 5.76 million this year.

Prospects for growing supply are negative for the commodity. At the same time, demand may wane amid uncertainty about the global economic growth. Crude was rising until recently despite analysts’ expectations, but now it is in downtrend, though it is too early to become completely bearish on the commodity.

Futures for delivery of WTI crude oil in June rose $0.13 (0.14 percent) to $94.34 per barrel as of 00:42 GMT on NYMEX today. Yesterday, the price dropped $0.96, the biggest drop since May 1. Brent crude was almost unchanged at $102.61 per barrel on ICE today after dropping 0.22 percent yesterday.

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