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Oil falls in price due to high OPEC output.

Oil falls in price due to high OPEC output.

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by staff ()

Oil falls in price due to high OPEC output.

World oil prices decreased on Tuesday, as investors are still concerned about the oil surplus in the market after reports on the growth of OPEC production.

Brent crude futures decreased by 0.37 percent and stood at $55.91, U.S. West Texas Intermediate (WTI) futures dropped by 0.24 percent was at $50.46, RIA Novosti reported.

OPEC oil production in September increased by 50,000 barrels per day on the background of an increase in Iraqi exports and a rise in production in Libya, according to Reuters.

The level of compliance with the OPEC + deal fell to 86 percent in September.

Saudi Arabia, OPEC’s biggest producer, boosted production by 60,000 barrels a day to 10.06 million barrels, while Gulf neighbor Kuwait lifted output by 50,000 barrels to 2.76 million barrels a day.

Oil prices are also affected by the strengthening of USD, which contributes to the appreciation of oil for holders of other currencies. Thus, the dollar index increased by 0.22 percent, to 93.84 points.

Now the market expects data on oil reserves in the U.S. from the American Petroleum Institute (API) and U.S Energy Department. Following the week ended on September 22, commercial oil reserves in the U.S. (excluding the strategic reserve) decreased by 1.8 million barrels, or 0.4 percent - to 471 million barrels.

Meanwhile, Russian Energy Minister Alexander Novak stressed that the OPEC and non-OPEC countries agreed to monitor not only oil production, but also its exports.

Novak specified that within the framework of the energy week, which will be held on October 3-7 in Moscow, mechanisms for monitoring oil exports will be studied and OPEC+ energy ministers will discuss proposals for the future of the oil deal.

The minister further stressed that Russia has invited Turkmenistan to join the OPEC oil output cut deal.

Turkmenistan is not going to officially join the deal, but is ready to be an observer and take part in discussions on the current market situation, he added.

In late 2016, OPEC and 11 non-OPEC countries, including Azerbaijan, agreed to curtail oil output jointly by 558,000 barrels per day. The agreement was signed for the first half of 2017 and on May 25, 2017, it was extended by late 1Q2018.

In August 2017, OPEC and participating non-OPEC producing countries recorded the highest conformity ever with their voluntary adjustments in production, achieving a level of 116 percent.

Azerbaijan’s Energy Ministry reported that the country is committed to oil cut deal and daily oil production in the country amounted to 785,700 barrels in September, 733,000 barrels of which were crude oil and 52,700 barrels-condensate.

Azerbaijan’s participation in joint oil production cuts is defined at 35,000 barrels per day.

The next JMMC meeting is scheduled for the day prior to the full ministerial meeting on November 30 in Vienna