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What’s next? – OIL 27.03.18

Mar 27 2018, 01:23 PM (+06) | Fortfs.com

Crude oil prices were higher on Tuesday early trading hours, supported by rising concerns that tensions in the Middle East could impact on oil production levels.

 

The US West Texas Intermediate crude contracts were up 0.44 percent to $65.84 per barrel as of 06:50 GMT. Meanwhile, Brent futures added 0.27 percent to $70.31 a barrel.

 

The possibility that the Trump administration will move forward with a series of sanctions against Iran, limiting Tehran’s ability to sell crude in international markets lifted prices.

 

Also contributing to the upward momentum were Saudi Arabia remarks over a potential OPEC+Russia extension of output cuts in 2019. Iraq has already shown support for the idea.

 

American production has already risen by almost a 25 percent since mid-2016, to 10.4 million barrels per day (bpd), moving above Saudi Arabia and keeping a short distance from Russia

 

Supporting crude markets were also hopes that China and the United States will solve their differences and avoid a trade war that could potentially damage both economies.

 

Ahead in the day, traders await the release of crude inventory estimates by the American Petroleum Institute as of 20:30 GMT.

 

Last week, the US Energy Information Administration reported a reduction of 2.6 million barrels for the week ended March 2.6, compared to an estimated 2.6 million barrels gain.

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