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Oil Edges Higher As Market Waits for EIA Report

June 20, 2018 at 13:31 by Matt Jackson

Oil prices have had a tumultuous week, making gains and losses in roughly equal measure. Following yesterday’s losses, the commodity has seen slight increases on Wednesday, potentially fueled by rumors of an OPEC supply decision. The continued threat of trade disputes between the USA and the rest of the world is also weighing on the market, and all eyes will be on the Energy Information Administration’s weekly inventory report, due to be published later on Wednesday.

OPEC supply rates have hit the headlines in recent weeks and months. According to reports and sources, there is a divide within the cartel. Russian oil companies are eager to open the taps and increase supply, while Saudi Arabia are considering a more measured approach to increasing their supply levels. At the other end of the table, however, are Iran, Iraq, and Venezuela, who have all said that they are not willing to agree to break the supply restriction deal that is currently in place and set to last until at least the end of this year. The group meets on June 22, when a decision is expected.

Meanwhile, the USA has continued with its policy of adding tariffs and levies to goods they import from countries around the world. While the market has been keenly watching the on-again, off-again, trade spat between the USA and China, the EU is set to introduce its own levies on US goods this Friday.

The market is also waiting for the weekly crude inventory report from the Energy Information Administration, especially after an unexpected spike in production, of 100,000 barrels per day, was reported last week. Analysts have predicted that there will be a considerable decline, of more than 3.5 million barrels; a decline that would push prices higher.

With so many factors potentially influencing prices, it is difficult to accurately predict any movement. WTI prices have risen 0.91% to $65.49 while Brent crude has risen 0.35% to $75.34 at 14:15 GMT but expect further movement when the EIA report is published later today.

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