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Oil in the red due to rising inventories in the U.S., high supply from OPEC

Oil prices declined on Wednesday morning due to the growth of stocks in the U.S. and a high level of supply from the OPEC countries.

19.Jul.17 12:08 PM
By Daria Zaytseva


Oil in the red due to rising inventories in the U.S., high supply from OPEC

By 9.05 GMT, futures for Brent crude fell 0.49% to $ 48.60 per barrel.

Futures for U.S. oil WTI by this time traded at $ 46.15 per barrel, 0.54% lower than the previous closing.

U.S. oil inventories rose by 1.6 million barrels to 497.2 million in the week ended July 14, while analysts predicted a 3.2 million barrel decrease, the American Petroleum Institute (API) said on Tuesday.

The focus of investors' attention is the official statistics from the Energy Information Administration (EIA), published on Wednesday.

Among other pressures, analysts call the high level of supply from OPEC, despite the global pact on limiting oil production.

The main driver of OPEC's production growth is the increase in the production of raw materials in Libya and Nigeria excluded from the deal.

The joining of the two above-mentioned countries to the oil pact is unlikely, the analysts of the bank added.

OPEC and several countries outside the organization, including Russia, previously agreed to cut production by about 1.8 million bpd to restore the balance of global supply and demand.

In addition, BNP Paribas gives a disappointing outlook for the growth in demand for raw materials by Chinese processors. According to the bank's calculations, the weakening of China's economy will lead to a slowdown in the growth rate of the load of local refineries in the second half of the year.

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