WTI Crude Oil prices declined 3.87% Vs the Dollars closing at 44.51 bbl Monday.
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Earlier this week, prices were supported by reports that Russian Federation Energy Minister Alexander Novak had said his country was prepared to meet with members and nonmembers of the Organization of the Petroleum Exporting Countries to discuss the oil market condition, if such a meeting were to take place. Last week, there was a sharp and surprising decline of 26 rigs.
Oil industry leaders have dismissed talk of the price of crude hitting the $20 lows predicted by analysts, who warned that believing that “oil prices will be with us forever may not be the right way of thinking”.
On Tuesday, the U.S. Energy Information Administration projected in its monthly forecast that the country’s crude output will fall through mid-2016.
Brent crude, the global oil benchmark, was trading 8 cents higher at $49.33 a barrel by 1008 GMT. “We will see a higher price again”.
Expectations that the Federal Reserve would not raise interest rates this year because of the weak global economy also boosted oil prices, analysts said. Crude Oil needs to be priced at 100 bbl plus for that work to proceed, so it looks like more money will be cut from those budgets say another $70 to 100-B.
World oil demand is estimated to increase by 1.5 million barrels per day in 2015, higher than the initial projection, El-Badri, secretary-general of OPEC, said in a statement to the global Monetary Fund (IMF).
Also supporting prices was the release of the Fed minutes, which showed that policy makers are concerned that the global economic slowdown may affect the outlook for the US. Output climbed by 76,000 barrels a day to 9.17 million as refinery utilization dropped by 2.3 percentage points, the EIA said.
“There are targets above the market”, said Robin Bieber, director of London brokerage PVM Oil Associates, adding: “It is not advised to be short”.
The worldwide Energy Agency has said it expects world oil demand to increase by around 1.7 million barrels per day (bpd) this year, one of the fastest rates for years as consumers respond to much lower fuel prices.
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Saudi Arabia on Sunday made steep cuts to its oil prices following cuts last month by other Gulf producers.
