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Crude Oil Higher as Russia Supports Production Freeze, Struggles to Keep Gains After Rig Count

October 21, 2016 at 17:55 by Vladimir Vyun

Crude oil rallied today (though prices for the West Texas Intermediate grade have backed as of now) after Russia confirmed commitment to join production freeze announced by the Organization of Petroleum Exporting Countries. Russian Energy Minister Alexander Novak said that output cap is necessary and that he is going to talk with his Saudi counterpart and make some proposal. While many analysts remain skeptical about the deal, markets welcome talks about possible freeze or even a cut.

Meanwhile, Baker Hughes reported that the number of US oil rigs rose by 11 this week. The current increase followed 16 consecutive weeks of rising oil rig count. The news is bad for oil, and this explains why the commodity struggles to keep gains.

Futures for delivery of WTI crude oil in December slipped 0.02% to $50.62 per barrel as of 17:43 GMT on NYMEX today. Brent crude was up 0.39% to $51.58 per barrel on ICE.

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