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Brent crude oil has fallen below $ 49

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Brent crude oil has fallen below $ 49

Brent crude oil has fallen below $ 49
September 30
09:00 2016

The 7% rise in oil price for 2 days, which was caused by the data on the preliminary arrangements on the general decline of oil production among the OPEC countries, has been replaced with the restrained fall on Friday morning. In the morning futures contracts for Brent crude oil for November have fallen in price by 0.7% to $ 48.88 per barrel on the London Stock Exchange.

By this time the quotes of November contracts for the US WTI crude oil have fallen by 0.6% and became equal to $ 47.55 per barrel on the trading on the New York Mercantile Exchange.

The OPEC countries agreed to reduce the oil production to 32,5-33 million barrels. But, probably, these arrangements may not lead to any result or may be completely broken because of the disagreement among the states which arise from time to time. However, investors view at the market prospects has become more optimistic.

According to analysts at Credit Suisse, the cartel, having concluded the agreement, has significantly accelerated the decrease in inventories and leveled the share of the downward price risks in the near future. The desire of the OPEC countries to give in to each other, despite the old divisions, has inspired market participants.

The agreements may mean that the leading oil producers, including Saudi Arabia and Iran, will be able to coordinate their actions in the market even in the future. In addition, the leading OPEC countries actually are giving up the strategy of the last two years, when the most important thing for them was to maintain the market role in the struggle with the companies-competitors from the United States. However, many of the details and terms of the agreement implementation reached in Algeria are at issue.

A specially created commission will have defined a new volume of oil production for each country until 30 November. In general, the OPEC countries are obliged to reduce the production of black gold to 32,5-33 million barrels per day, according to the agreement. The relevance is 33.2 million barrels per day.

According to the OPEC countries, the long-awaited balance in supply and demand in the oil market with the best circumstances will come at the end of the next year if nothing is done. In July the expected timing to achieve the balance in the oil market was more optimistic.

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