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Oil Prices Drop Below $80 Ahead of OPEC Meeting | INN

Oil Prices Drop Below $80 Ahead of OPEC Meeting | INN

USA crude oil exports dropped by more than 800,000 barrels a day (BPD) last week, to roughly 1.75 million barrels a day (MMBPD).

The Organization of Petroleum Exporting Countries (OPEC) may decide at its meeting in June to increase oil output to make up for reduced supply from Iran and Venezuela and in response to concerns from Washington over a rally in oil prices, OPEC and oil industry sources told Reuters.

Brent crude oil rose above 80 dollars a barrel on Tuesday, supported by concern that falling Venezuelan crude output and a potential drop in Iranian exports could further tighten global supply.

"We still have the unquantifiable impact of USA sanctions against Iran". Data provider Genscape Inc. was said to report that inventories fell by about 475,000 barrels between May 18 and May 22 at the key pipeline hub in Cushing, Oklahoma.

The increase in so-called discretionary consumer oil hedging, after a three-year period of low prices, is still relatively incipient, but has picked up over the last couple of weeks, according to traders, bankers and consultants familiar with the matter who asked not to be identified discussing private deals.

USA crude and distillate stockpiles fell last week, while gasoline inventories increased unexpectedly, data from the American Petroleum Institute showed on Tuesday.

WTI for July delivery dropped 36 cents to settle at $71.84 a barrel on the New York Mercantile Exchange. US President Donald Trump directed his ire against OPEC last month, saying in a tweet that "oil prices are artificially Very High!"

Some of the biggest oil-producing nations should step in to ease any supply shortfall should shipments from Venezuela or Iran collapse, IEA Executive Director Fatih Birol said earlier this week.

"The impact is more fear-related that we'll see more barrels come off the market", said Rob Haworth, senior investment strategist for U.S. Bank Wealth Management.

Growth in bullishness in the more obscure corners of the oil market hasn't been confined to options. There have also been reports that members of the Organization of the Petroleum Exporting Countries along with allies such as Russian Federation, known as OPEC+, will discuss easing their output cap at a meeting in Vienna on June 22.

Two months later, oil prices have reached the level that Saudi Arabia is said to have been aiming all along to boost the valuation of Aramco-Brent Crude at $80 a barrel.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.

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