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Oil Futures Flat After Week of Strong Gains

April 13, 2017 at 17:09 by Andrew Moran

Oil futures are trading relatively flat on Thursday after several trading sessions of solid gains. Oil prices are little changed following an industry report that supply and demand levels in the global oil market would soon balance out. US production remains a key concern for the global market.

May West Texas Intermediate (WTI) crude futures tumbled $0.13, or 0.24%, to $52.98 per barrel at 16:41 GMT on Thursday on the New York Mercantile Exchange. US crude has been experiencing strong gains over the last several trading sessions and is on track for its third consecutive weekly gain.

Brent, the international benchmark for oil prices, is also down at the end of the trading week. June Brent futures dipped $0.21, or 0.38%, to $55.65 a barrel on London’s ICE Futures exchange. Brent futures are trading at their highest levels since early March.

Oil prices are starting to pare their year-to-date losses. US crude is down more than 5% and Brent crude has fallen close to 4%. Last week’s US military airstrikes against a Syrian airbase helped oil futures.

The International Energy Agency (IEA) issued a report on Thursday that projected supply and demand levels in the international oil market were “very close” to balance.

It can be argued confidently that the market is already very close to balance, and as more data becomes available this will become clearer. We have an interesting second half to come.

Investors are still worried about US producers putting a damper on rising oil prices. Since Organization of the Petroleum Exporting Countries (OPEC) members slashed oil output in January, US companies have ramped up production efforts, offsetting cuts that have been achieved this year. According to the Energy Information Administration (EIA), there was a decrease in weekly US crude supplies but output hit a one-year high.

OPEC will hold its next meeting in Vienna on May 25 to discuss extending the six-month agreement beyond June. Kuwait, Saudi Arabia, and other OPEC nations are reportedly in favor of extending cuts.

Prior to the Good Friday long weekend, Baker Hughes will publish its weekly figures on active domestic oil rigs.

If you have any questions and comments on the commodities today, use the form below to reply.

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