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Oil prices steady on world market

16 January 2017 [16:00] - TODAY.AZ

By Azernews



By Nigar Abbasova

Oil prices were steady on January 16, supported by a weaker dollar, while the burning question of the oil market is still whether major producers will be able to fully materialize their reduction pledges.

 Brent crude futures were trading at $55.40 per barrel, while U.S. West Texas Intermediate (WTI) crude futures stood at $52.32 a barrel.

Support came as weaker greenback made fuel purchases cheaper for countries that use other currencies domestically, potentially spurring demand. Following a strong upward tendency, the currency lost its positions falling nearly 2.5 percent against a basket of leading currencies since its early-January peak.

Oil pricing is currently more dependent on the U.S. dollar, as market watchdogs are focused on the inauguration of Donald Trump that is deemed to be the big event of the week.

However, doubts that producers would fully implement announced crude output cuts is still looming over the market and dragging prices down.

Previously, Venezuelan President Nicolas Maduro said that the OPEC state intends to put forward a new proposal on stabilizing the oil prices

"Venezuela, as of next week, will circulate a letter with a new proposal, a new formula for the stability of real and just prices so that it can be studied and debated by all the governments that have signed this deal," he said.

OPEC Secretary General Mohammad Sanusi Barkindo arrived in Venezuela to meet with authorities of the country and exchange views on the current situation in the oil market.

 The International Energy Agency (IEA) recently announced that volatility is expected to be a dominating tendency in 2017 even though markets may rebalance in the first half of the year should output cuts pledged by producers are implemented.

Rising U.S. oil output is also among factors preventing crude from climbing further. The U.S. Energy Information Administration (EIA) earlier revealed a notable increase in production, particularly in 48 southern states. Total production stood at 8.95 million barrels per day (bpd) last week, the highest index since April 2016.

 Goldman Sachs forecasts year-on-year U.S. oil production to rise by 235,000 bpd in 2017, while the primary reason is that new wells are likely to start producing in the first half of the year.

URL: http://www.today.az/news/business/157750.html

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