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Crude Oil Prices Settle Nearly 2% Lower as Traders Fret Rise in OPEC Output

Crude Oil Prices Settle Nearly 2% Lower as Traders Fret Rise in OPEC Output© Reuters.

Investing.com – WTI crude oil prices resumed their selloff Tuesday, settling nearly 2% lower as traders continued to fret the prospect of an increase in output from OPEC and Russia to offset a potential shortage in global supplies.

On the New York Mercantile Exchange for July delivery fell 1.7% $66.73 a barrel, while on London’s Intercontinental Exchange, rose 0.28% to trade at $75.50 a barrel.

WTI crude oil prices fell on reports Russia and OPEC could increase production by up to 1 million barrels per day, to combat a potential supply shortage in the wake of falling Venezuela output and pending U.S. sanctions on Iran that could cripple the Islamic Republic’s oil exports.

“The ongoing downwards correction is still mostly seen as a reaction to increased talk of possibly higher production by OPEC,” said JBC Energy. “The mere chatter over this move has been sufficient to manage the market down by a full five dollars from last week’s peak.”

The mixed day for oil prices saw the spread between Brent crude and WTI crude prices rise to its widest since March 2015 as the latter came under added pressure amid signs of continued expansion in U.S. shale output.

The number of oil rigs operating in the US jumped by 15 to 859, its highest level since March 13, 2015, according to data from energy services firm Baker Hughes Friday.

U.S. oil production stood at 10.73 million barrels per day, the Energy Information Administration said last week.

Demand for crude futures has been waning in recent weeks for the week ended May 23 showed speculative net long positions fell to 633,400 from 644,400.

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Source: Investing.com

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