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Oil Drops to Multi-Year Lows due to Global Glut

October 16, 2014 at 2:03 by Vladimir Vyun

Crude oil continued to decline today following yesterday losses. West Texas Intermediate crude reached the lowest level in two years, while Brent oil fell to the lowest in four years. American Petroleum Institute reported that US inventories expanded by 10.2 million barrels last week. Analysts expect that today’s report from the Energy Information Administration will also show growth of stockpiles.

There are signs that the Organization of Petroleum Exporting Countries will not cut its output. Previously, experts speculated that the OPEC may reduce production to buoy the falling prices, but the battle for market share among the countries that comprise the organization makes such scenario unlikely.

All these factors add to the global surplus, meaning that prices will continue to fall.

November futures for WTI crude oil fell as much as 1.24 percent to $80.77 per barrel as of 1:56 GMT on NYMEX today. Brent grade of crude dropped 0.70 percent to $83.19 per barrel on ICE.

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