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Crude Oil Jumps on Hopes for Supply-Demand Balance

March 20, 2018 at 19:31 by Vladimir Vyun

Futures for crude oil touched the highest level in three weeks today as the special committee, appointed by the OPEC-led group aimed at reducing the global glut, said that supply and demand will reach balance by September. One of the factors helping to reduce global oil production was the economic crisis in Venezuela, which halved supply from the country since 2005. Prospects for the United States to pull from the Iranian nuclear deal and reinstituting sanctions against Iran also drove price higher.

The positive factors helped crude to overcome the issue that was plaguing other commodities — the upcoming Federal Reserve meeting and potential interest rate hike. It made the dollar stronger and hurt most other raw materials priced in the US currency, but oil avoided that problem. The commodity may yet face its own problems like rising output from the United States. The supply report from the American Petroleum Institute due to release later today will show if US production was indeed rising last week.

April contract for WTI crude oil jumped 2.16% to $63.40 per barrel as of 19:20 GMT on NYMEX today. May futures for Brent crude rallied 2.03% to $67.39 per barrel on ICE.

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