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Crude futures settle lower ahead of Opec meeting

Published 07/20/2017, 02:53 PM
Updated 07/20/2017, 02:53 PM
© Reuters.  Opec is set to meet on July 24

© Reuters. Opec is set to meet on July 24

Investing.com – Crude futures settled lower on Thursday, as uncertainty ahead of the Opec meeting next week offset recent data showing a drop in U.S. crude stockpiles for the third-straight week.

On the New York Mercantile Exchange crude futures for August delivery fell by 33 cents to settle at $46.79 a barrel, while on London's Intercontinental Exchange, Brent lost 0.93% to trade at $49.23 a barrel.

Investors remained uncertain as to whether Opec will introduce additional measures to curb the recent growth in supply, with a production cap for both Libya and Nigeria touted as a possible course of action.

In recent months both Libya and Nigeria, two countries exempt from the current output cuts, ramped up production, adding to the glut in supply, which has pressured prices for more than three years.

Some Opec members, however, appeared reluctant to introduce further measures to curb supply, insisting that it’s too early to determine whether the current level of production cuts need to be deepened.

"We are in the first two weeks of the extension period. It is too early to say now what I will do in November," Kuwait's oil minister Essam al-Marzouq said on Tuesday.

In May, Opec and non-Opec members agreed to extend production cuts of 1.8m bpd for a period of nine months until March but rising production from the U.S., Nigeria and Libya has undermined the cartel’s efforts to curb excess supply.

Also adding to the supply glut was a drop in the Opec’s compliance rate - with the deal curb production - to 78% in June , the lowest rate during the first six months of the agreement," the IEA said in its report earlier during the month.

Meanwhile, market participants are expected to monitor Baker Hughes rig count for any signs of an increase in drilling activity, after rig numbers slowed in recent weeks.

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