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Oil Lower amid Skepticism About Production Freeze Deal

April 4, 2016 at 16:13 by Vladimir Vyun

Crude oil declined today amid speculations that the coming meeting of major oil producing countries will not result in production freeze. Iran continues to insist that it is not going to freeze output until it reaches the levels it had before sanctions imposed by Western nations. Saudi Arabia (the country that was the initiator of the talks about freeze in the first place) signaled that it would not cap its output unless Iran joins the deal. Meanwhile, Russia reported that it reached the highest rate of production in 30 years.

All in all, things did not look good for oil, therefore it is not surprising that traders were taking profit closing their long positions. It is important to mention that some analysts argue that prices should not go substantially lower as skepticism about the production freeze deal means that a negative outcome is already priced in.

Contract for delivery of WTI crude oil in May declined 0.73% to $36.52 per barrel as of 16:06 GMT on NYMEX today. June Brent crude dipped 1.27% to $38.18 per barrel on ICE.

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