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In July careful attention directed to the demand of the U.S. oil and drain glut

U.S. oil traders believe the new month is the last best opportunity this year to see how the inventories subside.

02.Jul.17 11:32 AM
By Daria Zaytseva


In July careful attention directed to the demand of the U.S. oil and drain glut

Export opportunities to Asia and big U.S. summer driving demand - a record number of motorists are expected to hit the road for the Fourth of July holiday - are seen as the primary drivers for a reduction in stocks that have remained above seasonal averages.

According to the U.S. Energy Information Administration, July is usually a big month for reductions - over the last five years, inventories of crude oil have dropped by an average of 2.9 million barrels per week in July.

In addition, the U.S. crude exports to Asia could help to get rid of excess supply.

But analysts warn that if the stocks will not decline seriously, it may raise the hopes of many in the industry of seeing higher prices by the end of this year.

Investors came into this year optimistic, U.S. crude oil prices CLc1 exceeded about $ 55 per barrel in February, after the deal done by the OPEC with other key producers to reduce the supply.

Several banks in the last week cut their oil price projections for the rest of the year. U.S. crude futureshave slumped about 15 percent so far this year to about $46 per barrel, and as of Friday, ended its worst half-year performance in 19 years.

In a Credit Suisse’s note on Thursday reported that they expected to get real clues in the next 4-5 weeks about the mood of the oil market in the second half of 2017.

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