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Oil is falling on the background of the dollar strengthening and the fear of the market glut

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Oil is falling on the background of the dollar strengthening and the fear of the market glut

Oil is falling on the background of the dollar strengthening and the fear of the market glut
September 05
09:00 2016

Oil quotes have fallen on Monday, losing the benefit of 3 percent, which was gained at the last auction. In its turn, the US dollar is increasing. The anxiety about the global market glut still persists despite the signals that suggest that manufacturers may attempt to combat low prices.

The weak statistical data on the employment in the US published on Friday, almost did not shake the confidence of the investors that the Fed was likely to raise interest rates in the near future. The US currency has strengthened its position against this background.

By the beginning of the day futures for Brent oil have fallen by 0.26 percent – to $ 46.71 per barrel.

By this time futures contracts on the US crude oil have fallen by 0.41 percent – to $ 44.26 per barrel. A trading session in the US is likely to be limited due to the celebration of Labor Day.

On Saturday Alexander Novak, Minister of Energy of the Russian Federation, said to the reporters that the issue of the oil production suspension would be considered among other topics at the meeting of the of raw material producing countries from the OPEC organization. The meeting is going to be held in September in Algeria.

Nevertheless, in spite of the forecasts of the oil production discussion, almost no one seriously believes that the OPEC countries will come to some agreement.

Tony Nunan at Mitsubishi Corp in Tokyo said: “Despite the fact that this will be discussed in Algeria, there is no certainty that something will be done.”

“The position of Saudi Arabia has not changed. They are open to any agreement on the production freeze if Iran and other leading manufacturers support it“, – he added.

On the eve Iran made a statement that it was planning to work together with other oil producers in matters of the raw material extraction freeze only if all the other states of OPEC recognized its right to restore the country’s share in the market in full.

On Monday the representative of the National Iranian Oil Company said that Tehran was ready to increase the raw material production to 4 million barrels per day during a few months if it was required by the market demand.

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