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Crude prices continue to decrease

21 June 2017 [14:27] - TODAY.AZ

By Azernews


By Sara Israfilbayova

World oil prices slightly declined on June 21 after falling more than 3 percent on June 20 amid fears of investors over the excess supply to the market.

Brent crude futures are down 0.26 percent and amounts to $45.90 per barrel, meanwhile U.S. West Texas Intermediate (WTI) crude futures are down 0.14 percent and stand at level $43.45 per barrel.

The price of OPEC’s basket of 13 crudes stood at $43.90 per barrel on June 20, as compared to $44.46 a barrel on June 19.

Despite the fact that OPEC countries and other oil-producing countries have been cutting production since January, investors still believe that their agreement is ineffective.

Growth in production in the U.S. and Libya, as well as a high level of oil reserves, undermines the forecasts that an oil production reduction will raise prices for "black gold".

"The August program to increase exports in Nigeria and the rise in oil production in Libya should put pressure on oil prices in the near future,” said senior analyst of PVM Oil Associates Tamas Varga, according to Reuters.

Market analyst at futures brokerage Forex.com. Fawad Razaqzada said that the lack of a positive response in oil prices clearly suggests market participants are not convinced that the OPEC's efforts will help shore up prices in a meaningful way in the short-term as shale supply continues to rise in the U.S, further adding that unless a marked reduction in crude stockpiles will be obseved, the possibility of further short term falls in the price of oil cannot be ruled out.

On November 30, 2016 OPEC member countries and non-OPEC parties, Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and the Republic of South Sudan agreed to remove 1.8 million barrels a day from global oil production.

The parties decided to extend the production adjustments for a further period of nine months, in May 2017.

URL: http://www.today.az/news/business/162446.html

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