Commodity Blog

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Oversupply Concerns Prevent Oil from Rallying

October 26, 2015 at 23:55 by Vladimir Vyun

Crude oil fell today, probably undermined by persisting concerns about oversupply on the market. The worries did not allow the commodity to profit from favorable fundamentals.

And there were plenty of supportive factors that could have helped crude to rally. Firstly, the drop of the US dollar following last week’s huge rally. Secondly, stimulating measures that China’s policy makers are implementing in order to reignite the nation’s slowing economic growth. Thirdly, the falling number of US oil rigs as was reported by Baker Hughes (though it is important to note that the drop was the smallest since the current string of reductions has started).

Yet all the positive fundamentals were unable to support oil. Contract for delivery of WTI crude in December slipped 0.23 percent to $43.88 per barrel as of 23:49 GMT on NYMEX today. Brent dropped 0.94 percent to $47.54 per barrel on ICE.

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