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Crude Oil Sinks on Concerns About Global Oversupply

November 10, 2016 at 22:48 by Vladimir Vyun

Futures for crude oil sank today amid concerns that global oversupply will persist. The International Energy Agency predicted that supply should increase next year while demand should stay unchanged:

Total non-OPEC output will rise by 0.5 mb/d next year, compared to a fall of 0.9 mb/d in 2016. This means that 2017 could be another year of relentless global supply growth similar to that seen in 2016.

The only hope for the oil market is potential production cuts from the Organization of Petroleum Exporting Countries. The OPEC members meet in Vienna on November 30 to discuss output reduction as a measure to buoy prices, though there is plenty of skeptics who do not believe that the deal will implemented.

Futures for delivery of WTI sank 2.16% to $44.29 per barrel as of 22:35 GMT on NYMEX today. Contract for delivery of Brent crude in January dropped 1.38% to $45.72 per barrel on ICE.

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