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Oil Slips on Rising US Crude Stockpiles, OPEC Meeting Uncertainty

November 29, 2017 at 17:49 by Andrew Moran

Oil futures are sliding midweek as investors are uncertain about the outcome over Organization of the Petroleum Exporting Countries (OPEC)’s meeting in Vienna on Thursday. Crude prices are also slipping on rising US crude stockpiles.

January West Texas Intermediate (WTI) crude futures tumbled $0.89, or 1.53%, to $57.10 per barrel at 16:33 GMT on Wednesday on the New York Mercantile Exchange. Earlier in the trading session, US crude climbed above $58 before paring those gains.

Brent, the international benchmark for oil prices, is also slumping in the middle of the trading week. January Brent crude futures dipped $0.70, or 1.10%, to $62.91 a barrel on London’s ICE Futures exchange. Brent crude prices jumped above $63 in the morning part of the trading session before paring those gains as well.

According to the US Energy Information Administration (EIA), domestic crude supplies fell 3.4 million barrels for the week ending November, while US output rose 24,000 barrels to 9.68 million barrels per day (bpd). Gasoline stockpiles surged 3.6 million barrels, while distillate stockpiles added 2.7 million barrels.

The US is about 300,000 barrels away from surpassing the record set in the 1970s when the country produced 10 million bpd.

Investors are concerned ahead of the November 30 meeting among OPEC and oil-production countries. They are expected to agree to extend the production-cap arrangement by an additional nine months. Analysts note that Russia and Saudi Arabia may attempt to make a few changes that would afford them the opportunity to expand output.

With the US shale revolution continuing to expand, energy ministers in oil-producing nations fear that the international crude market could overheat. Russia is worried that a substantial increase in oil prices could boost the rouble, impacting Moscow exports. Meanwhile, if output ramps up, then the oil market could collapse again, which would then cause prices to crater below the $50 threshold. In recent weeks, prices have stabilized well above $50 a barrel.

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