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Oil Backs Off from Highs, Stays Above $50 Level

December 5, 2016 at 21:15 by Vladimir Vyun

Price for crude oil backed off today but not before reaching the highest level in more than a year. Futures still hang above the $50 level, supported by the last week’s historical deal of the OPEC members to cut their production.

Now, traders wait for the meeting between the OPEC and non-OPEC producers on the weekend to see if non-OPEC countries can be convinced to reduce their output as well. Many analysts doubt that such an agreement will be reached, as the OPEC cuts encourage other producers to increase output, not reduce it. Saying that, many people were skeptical about the ability of the OPEC to reach an accord between its own members, but the organization showed that it is able to achieve its goals if it really wants.

Some experts explain the crude’s gains also by colder weather in the United States, which increased demand for oil and its byproducts.

January futures for delivery of WTI crude oil slid 1.22% to $51.05 per barrel as of 21:02 GMT on NYMEX today after climbing to $52.42 intraday — the highest level since July 2015. February contract for Brent crude dropped 0.42% to $54.23 per barrel on ICE following the rally to $54.95 — also the highest price for the most-active contract since July 2015.

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