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Oil Backs Off After Rally Caused by EIA Supply Report

October 6, 2016 at 0:47 by Vladimir Vyun

Futures for crude oil backed off a little on Thursday after rallying on Wednesday. The rally followed the supply report from the Energy Information Administration. The EIA reported that US reserve shrank 3.0 million barrels last week instead of rising by 1.1 million as analysts had predicted. Still, the inventories remained near the record levels for this time of year.

As for other factors affecting crude, the commodity still remains supported by the announcement of production cuts from the Organization of Petroleum Exporting Countries, though there is also skepticism about the organization’s ability to implement the output reduction. Meanwhile, prospects for monetary tightening from the Federal Reserve were supporting the dollar, hurting commodities priced in the US currency, but that factor had more impact on precious metals than on the energy market.

Futures for delivery of WTI crude oil in November slipped 0.26% to $49.70 per barrel as of 00:13 GMT on NYMEX today. December contract for Brent crude was down 0.25% to $51.73 per barrel on ICE.

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