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 Oil Prices Continue Dropping Due to U.S. Stockpiles Increase

West Texas Intermediate traded near the lowest closing price in three days amid speculation crude stockpiles increased to the highest level since July in the U.S., the world’s biggest oil consumer. Brent fell in London.

Futures were little changed in New York after falling just 1 cent yesterday. Crude inventories are forecast to have expanded by 3.8 million barrels to 381.5 million last week, a Bloomberg News survey showed before government data tomorrow. OPEC is unlikely to reduce its production target when it meets next month, Mohsen Qamsari, a director for international affairs at National Iranian Oil Co., said yesterday according to the Oil Ministry's news service, Censor.NET reports citing Bloomberg.

Read also: Russia May See Oil Production Collapse Due to Depletion of Deposits, Lukoil Vice President Says

"It's clear that the supply situation is at a record in terms of stockpiles, so it's going to take some time to clear that excess," Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone today. With OPEC, "the expectation is that they will announce a cut, but the question is whether or not they will deliver on them."

WTI for December delivery was at $81 a barrel in electronic trading on the New York Mercantile Exchange at 8:45 a.m. London time, unchanged from yesterday, which was the lowest closing price since Oct. 22. The volume of all futures traded was about 34 percent below the 100-day average for the time of day. Prices have declined 18 percent this year.

Read also: Oil Drops to $88. OPEC Does Not Plan to Cut Production

Brent for December settlement was 20 cents lower at $85.63 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $4.61 to WTI on ICE. The spread closed at $4.83 yesterday, narrowing for the first time in a week.

 
 
 
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