Markets

Crude prices tumble 4% ahead of inventory data

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Investing.com - Crude futures settled lower on Wednesday, as investors questioned Opec and its allies' efforts to reduce the glut in supply, after Russia said that it would not support deepening oil production cuts.

On the New York Mercantile Exchange crude futures for August delivery fell 4.1% to settle at $45.13 a barrel, while on London's Intercontinental Exchange, Brent dipped by 3.57% to trade at $47.84 a barrel.

Investors' hopes of deeper production cuts were dashed, after a Bloomberg report said that Russia doesn't want to change the current deal because any further supply curbs would send the wrong message to the market, according to government officials.

In May, Opec and non-Opec members agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.8 million bpd agreed in November last year.

Adding to bearish sentiment was data released from Reuters, showing an uptick in Opec exports for June to 25.92m barrels per day (bpd), up 450,000 bpd from May, and 1.9 million bpd more than a year ago.

The slump in oil prices on Wednesday, ended their longest winning streak in five years and comes ahead of American Petroleum Institute's oil inventory report due later on Wednesday and the Energy Information Administration's weekly inventory report due Thursday.

The Energy Information Administration's weekly report is expected to show that crude stockpiles fell by 2.2m barrels last week.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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