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Crude Oil Slides as OPEC Cuts Have Little Impact on Market

August 3, 2017 at 21:17 by Vladimir Vyun

Crude oil dropped today amid concerns that production cuts initiated by the Organization of Petroleum Exporting Countries and its allies are not helping to rebalance the market. While OPEC compliance to the accord was at record high, there were doubts that two major producers, Iraq and United Arab Emirates, will be able to fulfill their obligations. The countries’ officials said that they are committed to reduce output but complained that the secondary sources’ estimates of their production before the deal took effect in January were too low, making it hard for them to meet their goal.

Another problem was that despite the cuts, OPEC had enough inventories to increase exports. In fact, organization’s last month exports reached record high, mainly due to supply from African members.

The OPEC will meet next week and may discuss addition measures to reduce global oversupply.

September futures for delivery of WTI crude oil declined as much as 1.33% to $48.93 per barrel as of 21:04 GMT on NYMEX today. October contract for Brent crude dropped 0.84% to $51.92 per barrel on ICE.

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