Oil prices dipped on Wednesday, trading around multi-month lows as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output.
Compliance with an agreement by the Organization of the Petroleum Exporting Countries and other producers to cut output by 1.8 million barrels per day (bpd) for six months from January reached its highest in May since curbs were agreed last year.
"The lack of a positive response in oil prices clearly suggests market participants are not convinced that the OPEC's efforts will help shore up prices in a meaningful way in the short-term as shale supply continues to rise in the U.S.
If we do not see a significant reduction in US oil inventories later today at 17:30, the likelihood of a more severe decline remains in effect. Expected data is -2,106M, but if we don't see a higher figure than this is likely to follow a new strong downward momentum in the oil price.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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