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Oil Prices Spiral Down as OPEC Rhetoric Pales

After a week-long flirtation with higher oil prices thanks to vague rhetoric and ambiguous talk from the world’s major producers about an output freeze to January levels, oil was back down this morning.

The rhetoric has now faded and is failing to capture the attention of the market, and the release yesterday of Energy Information Administration (EIA) data showing a build in U.S. crude inventories stymied the climb.

This morning, WTI Crude Futures were down, and we’re looking at a dip below $30 per barrel by the close of trading today. Brent crude was down 1.11% this morning, with WTI down over 4 percent at $29.29.

Related: Russia Looks To Privatize Oil Assets, But Who Will Buy Them?

OPEC rhetoric, plus some wild estimations by the American Petroleum Institute (API) about a dip in crude inventories despite plenty of predictions to the contrary, had contributed to a nice recovery start for oil, but it was to be short-lived.

Yesterday’s report from the EIA showed an increase of 2.1 million barrels in crude inventory last week, news that sent oil prices down by over a dollar yesterday.

The U.S. Energy Information Administration (EIA) has released its weekly crude oil inventory report, showing an increase of 2.1 million barrels last week, sending oil prices down by over a dollar.

Related: Venezuela Raises Fuel Prices By More Than 6,000 Percent

On the OPEC rhetoric front, the market has finally responded to the slim chances of Iran or Iraq joining in calls for an output freeze to January levels.

Nonetheless, the market had continued until late yesterday to bank on vague Iranian statements of support for the Saudi-Russian freeze plan, but no commitment to do so itself. Likewise, lraq, reeling from conflict and facing the most severe economic crisis, has not—and is not likely to—commit.

By James Burgess of Oilprice.com

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