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Posted by Joseph Trevisani on Jun 22, 2017 5:10:14 PM

After losing more than 4 percent in the first three sessions this week and 17 percent since May 25th, West Texas Intermediate managed a slight gain to Thursday's close, though the American crude standard finished below $43 for the second day in a row, the first time that has happened since last August. 

Crude oil has plunged into a bear market this year with prices down 21 percent from February's high close of $54.45 as commodity markets have priced in two damaging factors--the rapid rise in U.S. oil production, up 10.4 percent in eight months to the highest level since August 2015 according to the Energy Information Agency and the apparent ineffectiveness of OPEC and Russian production cuts to affect supply and prices.

When U.S. production is combined with increasing output in Libya and Nigeria the supply glut looks to continue at least through the Northern Hemisphere summer, normally the season of highest demand. 

The West Texas Intermediate futures contract for August delivery rose 21 cents to close at $42.74 a barrel, up $0.21 on the New York Mercantile Exchange. 

WTI has now lost all of the price advantage it gained after November's OPEC and Russian agreement to cut production in an effort to restrict supply and boost prices. 

Joseph Trevisani

Chief Market Strategist

WorldWideMarkets Online Trading

Charts: Thomson/Reuters

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