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Crude prices drop

1 August 2018 17:13 (UTC+04:00)
Crude prices drop

By Sara Israfilbayova

World oil prices decline on August 1, investors negatively apprehended data from the American Petroleum Institute (API) about the unexpected increase in oil reserves in the U.S. over the past week.

Brent crude oil futures were at $74.03 per barrel, down 0.24 percent, U.S. West Texas Intermediate (WTI) crude futures were down 0.51percent, at $68.41 a barrel, according to RIA Novosti.

The API reported that for the week of July 28 commercial oil reserves in the U.S. climbed 5.6 million barrels, or 1.4 percent, to 410.5 million barrels. At the same time, gasoline reserves fell by 791,000 barrels, distillates - increased by 2.9 million barrels. Stocks of raw materials at the country’s largest terminal in Cushing declined over the period by 930,000 barrels, according to the API.

Analysts believe that stocks fell by 2.8 million barrels, or by 0.7 percent, to 402.1 million barrels.

Signs that the supply of oil through the Bab al-Mandeb Strait in the Red Sea may resume also affected prices.

Yemeni group Houthi stated that it is ready to unilaterally stop attacks in the Red Sea in support of peaceful efforts.

Saudi Arabia suspended oil supplies across the strait last week after Houthis attacked two Saudi oil tankers.

OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.

OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.

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Sara Israfilbayova is AzerNews’ staff journalist, follow her on Twitter: @Sara_999Is

Follow us on Twitter @AzerNewsAz

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