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Crude Oil Rallies on OPEC Supply Report, Talks About Supply Cuts Extension

September 12, 2017 at 21:30 by Vladimir Vyun

Crude oil rallied today amid speculations that the Organization of Petroleum Exporting Countries will extend its production cut deal. The agreement reached in late 2016 to reduce output as a measure to buoy struggling oil should expire in March 2018. The OPEC and its allies will discuss an extension into the second half of the year.

Adding to the bullish momentum of prices was the OPEC supply report released today. It predicted that global demand for crude will increase by 1.35 million barrels per day in 2018, an increase by 70,000 from the previous estimate. Moreover, the organization reported that OPEC oil production fell by 79,000 barrels per day in August according to the secondary sources.

Not everything was bullish for crude, though. Analysts forecast the report from US Energy Information Administration released on Wednesday will show an increase of US inventories by 4.1 million barrels last week. The stockpiles grew by 4.6 million the week before.

Futures for delivery of WTI crude oil in October rose by 0.62% to $48.37 per barrel as of 21:21 GMT on NYMEX today. November contract for crude advanced 0.8% to $54.27 per barrel on ICE.

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