Crude oil prices fell after the Energy Information Administration reported that crude oil inventories added 3.6 million barrels by November 23rd. This was compared to 4.9 million barrels a week.
The EIA figures reported an increase in inventory with 3.453 million barrels of the US Petroleum Market Institute yesterday. This figure did not affect prices significantly.
The EIA also noted that last week's gasoline inventories fell by 800,000 barrels and added 2.6 million barrels of distilled fuel stocks. A week ago, the authority predicted a decline of 1.3 million barrels, and a decline of 100,000 barrels in distilled fuel stocks.
Meanwhile, production strikes new heights and will continue to follow most of the forecasts, unless oil prices continue to drop rapidly. However, the likelihood of this happening is relatively low. OPEC will meet in Vienna next week to discuss a new round of production cuts, and most analysts expect that cuts in Russia are expected again.
However, Morgan Stanley sees a 33 per cent chance that the cartel will fail or refuse to participate in production cuts. In this case, prices will fall further, due to a gloomy economic outlook and concerns over surplus crude oil supply. The argument against a production outage is simple enough: market share. It is no wonder that some OPEC members are already talking against a group who said they are expected to be exempted from any interruption, especially against Libya.
In addition to the OPEC meeting, oil market observers would be watching the G20 meeting, where Russia could provide a clear indication that it could participate in any interruption agreement. Just as for the last time, if Moscow decides to participate in the cuts, it will be a crucial ally for the cartel.
By Irina Slav for Oilprice.com
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