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Crude oil market: No one knows where it is going
Apr 25: The crude market is showing signs of weakness.
8Surpluses are growing again, with the Brent June-July spread this week fell to an unusually weak minus 55 cents per barrel, down from parity just two months earlier. The negative structure is known in the industry as contango.
8Traders may be forced to seek tankers as temporary floating storage facilities.
8Oil traders said OPEC was initially successful, driving oil prices higher and tightening time-spreads. But the group was a victim of its own success, as those same spreads forced crude out of storage, flooding an already weaker physical market with supply. Higher headline prices also boosted U.S. shale producers.
8There is now talk of extending the OPEC-led crude production cuts. OPEC and several other producers including Russia, Mexico and Kazakhstan agreed in December to reduce production by about 1.8 million barrels a day -- the first OPEC and non-OPEC deal in more than a decade -- in an effort to counter an oversupply weighing on prices. The producer group meets again May 25.
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