Doubts Over OPEC Weigh on Crude Prices

Doubts Over OPEC Weigh on Crude Prices

In the letter, the senators said a run-up in oil prices is "effectively a tax on every American family's discretionary budget" since the price of oil directly affects the price of gasoline.

Oil prices fell on Wednesday, hit by rising supplies in the United States and expectations that producer group OPEC could relax voluntary output cuts.

Brent futures for August settlement declined as much as 62 cents to $75.26 on the London-based ICE Futures Europe exchange, after sliding 0.8 percent on Tuesday. US light crude was 20 cents lower at $66.16.

Oil slipped after Russian Federation was said to propose that OPEC and other producers in a global alliance reverse the supply cuts they've been making since early a year ago. On Tuesday, OPEC emphasized the deep uncertainty over the strength of demand later this year.

Futures in NY dropped as much as 1.3 percent after Russian Federation, which has already started increasing output, was said to suggest that OPEC and its allies be allowed to return production to October 2016 levels within three months, although not all nations would be able to do so.

"Saudi Arabia and Russian Federation have already started to lift production", he said.

Pumped further by global trade war fears, oil prices have since surged to multi-year highs, only to then fall back again somewhat, the IEA said.

"The prospect of easing supply curbs from OPEC-led producers continues to be reflected in oil's overall depressed price", Lukman Otunuga, analyst at brokerage FXTM said as quoted by Reuters.

The deal, which is due to run out at the end of 2018, has succeeded in boosting oil prices above $70 a barrel from below $30 a barrel in early 2016. Russia's production was 11.1 million barrels a day in June, exceeding its quota, according to sources familiar with the matter.

"With rising production from US shale adding to oil's woes and reviving oversupply concerns, further downside could be a possibility in the short to medium term", Otunuga said.

"The U.S.is important to us, but. we have not received any official communication, or even unofficial communication, from the administration", he told CNN.

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