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Oil Sinks as Traders Feel Less Excited About Supply Cap Proposal

February 23, 2016 at 23:38 by Vladimir Vyun

Crude oil sank today as Saudi Arabia ruled out production cuts, preferring just to freeze output at January levels. Considering that those level were near the record anyway, such move is unlikely to ease supply glut. And Iran is not going to agree even to just capping production as it wants to ramp up its output its oil exports after international sanctions have been lifted.

Meanwhile, the American Petroleum Institute reported that US stockpiles swelled by 7.1 million barrels last week, exceeding analysts’ expectations of a 3.4 million increase. Cushing inventories expanded by 307,000 barrels.

WTI crude oil for delivery in April settled down $1.52 to $31.87 per barrel on NYMEX. Brent crude declined as much as 4.1% to $33.27 per barrel on ICE.

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