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Oil Experiences Small Slide Ahead of Stockpile Data

May 31, 2018 at 13:07 by Matt Jackson

Oil prices arrested their five session decline yesterday, but have slipped back a little again today. While Brent crude made slight gains, WTI crude has posted more than 1% in losses for the day.

Prices rose more than 2% yesterday as reports emerged that suggested OPEC would not increase its supply to meet a shortfall from Iran and Venezuela. The market had been expecting Russia, as well as Saudi Arabia and other OPEC nations to cut the curbs they had agreed to place on their oil supply in recent years. However, with a meeting of OPEC nations scheduled for June, the most recent reports have suggested that OPEC is not ready to make this decision, at least not yet. With the increase in supply having been factored into prices in recent weeks, the latest report caused prices to increase. Yesterday’s price increase came after five declines in a row, and was a welcome sight for investors, but it has not continued today.

The American Petroleum Institute usually reports on oil stockpiles on a Tuesday, but Monday’s holiday meant that the report was a day later than usual this week. Yesterday, the group announced an increase of 1 million barrels of oil. An increase in supply means that demand is filled more easily and will usually lead to a slide in prices, unless the increased supply was expected. Analysts had expected a decline in stockpiles.

The Energy Information Administration, EIA, is due to release its own report on Thursday, highlighting their own stockpile data. Analysts expect them to announce a fall of 600,000 barrels; a rumor that could be helping hold up prices.

Brent crude oil prices, at 14:00 GMT, were down 1.06% at $67.49. Brent crude prices were up 0.28% at $77.94. The difference in price movements also means that Brent and WTI prices are becoming increasingly disparate.

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