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Supportive Factors Bolster Prices for Crude Oil

July 9, 2019 at 23:24 by Vladimir Vyun

Crude oil rose today with the help of a range of supportive factors. Among them were production cuts by the Organization of Petroleum Exporting Countries and its allies, most notably Russia, and geopolitical tensions in Middle East. Russia’s oil production fell to almost a three-year low after Russian oil pipeline monopoly Transneft limited intake from the country’s biggest producer Rosneft. Meanwhile, reports suggest that Egypt seized Ukrainian tanker that was carrying presumably Iranian oil when it was passing the Suez Canal ten days ago. Adding to positive factors for crude, the American Petroleum Institute reported that US crude oil inventories decreased by 8.129 million barrels last week versus the decline by 3.081 million barrels predicted by analysts.

Not all factors were positive for crude, though. The Energy Information Administration estimated that US oil production should reach the record high of 12.36 million barrels per day in 2019, up from the previous record of 10.96 million bpd in 2018. Risk aversion caused by uncertainty whether the Federal Reserve will cut interest rates in the nearest future was also weighing on crude oil.

Futures for delivery of WTI crude oil in August climbed 1.09% to $58.46 per barrel as of 23:16 GMT on NYMEX today. September contract for Brent crude edged up 0.08% to $64.16 per barrel on ICE.

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