Oil prices fall as U.S., Russian Federation supplies grow

Oil prices fall as U.S., Russian Federation supplies grow

Oil prices fall as U.S., Russian Federation supplies grow

Among them are the political and economic instability in Venezuela and speculations that Saudi Arabia and Russian Federation are ready to exit the supply cuts agreed on by members and non-members of Organisation of Petroleum Exporting Countries (OPEC).

The situation got so bad earlier in the week that the government threatened force majeure that would have effectively cancelled all future delivery contracts.

Meanwhile, Venezuelan oil exports have been crippled as the Latin American nation spirals toward economic collapse.

"This shift to Opec actively contemplating relieving production cuts puts a pretty bearish spin on this market", said Rob Haworth, who helps oversee $151 billion at US Bank Wealth Management in Seattle. "That's really what we're under pressure from".

The price of Brent crude rose Wednesday after output from OPEC member Venezuela came into renewed doubt, enhancing worries over global supply.

In oil market fundamentals, however, not all things point to higher prices, with output from the three biggest producers, Russia, the United States and Saudi Arabia on the rise. "In the end, OPEC will make sure to tread carefully".

U.S. West Texas Intermediate (WTI) crude futures were down 38 cents, or 0.6 percent, at $65.57 a barrel. Total volume traded was about 15 percent less than the 100-day average. ICE gas oil changed hands at $659.75 a metric ton, up 0.8%.

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Some Opec members are reluctant to relax output caps that have been in place since the start of 2017.

Against that backdrop, Russian President Vladimir Putin is scheduled to meet Saudi Crown Prince Mohammed bin Salman on Thursday next week.

Headlines on OPEC members' plans for the meeting later this month will lead to volatile market swings, said Tariq Zahir, managing member of Tyche Capital Advisors in NY.

The cause of Friday's losses is ironic considering so much focus has been paid over the past few weeks to the widespread argument that the crude market is tightening rapidly (due to dramatic declines in output from troubled major producers such as Venezuela), and to the point where even the mighty US shale industry won't be able to meet demand.

Hedge funds and other money managers cut their bullish bets on U.S. crude futures in the week ended June 5, the U.S. Commodity Futures Trading Commission (CFTC) said.

Nymex reformulated gasoline blendstock - the benchmark gasoline contract-fell 0.76% to $2.11 a gallon.

In India, Asia's No.2 buyer, fuel demand rose by 3.4 percent in May year-on-year, data showed on Monday.

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