Crude Oil Drops as OPEC Output Grows, Russia Opposes Deeper Production Cuts

Crude oil dropped today, ending the rally that has started on June 22. Traders were still concerned about oversupply on the market. Output from the Organization of Petroleum Exporting Countries was growing despite relatively high compliance from members that agreed to cut their production.

The problem was that those countries that were exempt from production cuts, like Nigeria and Libya, pumped enough oil to offset the cuts. Without deeper cuts, the OPEC is unlikely to reach its goal of rebalancing the market. Yet Russia, the biggest non-OPEC producer that joined the output reduction accord, opposed the idea of deeper cuts.

The Energy Information Administration will report on US inventories tomorrow. The report is usually released on Wednesday, but it was postponed due to the Independence Day holiday. Analysts predicted that the report will show a decrease by 2.4 million barrels.

August futures for delivery of WTI crude oil dropped as much as 1.23% to $46.49 per barrel as of 9:57 GMT on NYMEX today. September Brent crude declined 1.13% to $49.05 per barrel on ICE.

This post was originally published by EarnForex