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Oil Falls Below $70 as Market Pessimism Outweighs Stockpile Drop

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(Bloomberg) — Oil fell to the lowest in more than five months as concerns that the market has excess supplies overshadowed a report showing shrinking US inventories.

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US benchmark West Texas Intermediate slipped as much as 4% to break below $70 a barrel and reach the lowest intraday price since June 29. Global benchmark Brent retreated as much as 3.5%, slipping below $75. WTI futures have now dropped by more than a quarter from this year’s peak in late September.

Crude has plummeted in recent weeks amid signs of swelling global supplies, including estimates from ship-tracking firms that American crude exports are nearing a record 6 million barrels a day. The Organization of Petroleum Exporting Countries and its allies announced deeper output cuts on Thursday in a bid to stabilize markets, but the move failed to arrest the slide as traders remained skeptical the cartel’s members will follow through on the curbs.

Even a US government report on Wednesday that showed the country’s crude stockpiles falling 4.63 million barrels couldn’t prevent oil from dropping even further. Traders are also partly ignoring the Energy Information Administration data showing a decrease in US crude exports last week because the figure’s so-called adjustment factor — akin to a margin of error — was the biggest move on record.

In a reflection of the market’s weakness, Saudi Arabia has reduced its official selling prices to Asia by the most since February.

Russian Deputy Prime Minister Alexander Novak said on Tuesday that OPEC+ could take further measures if last week’s agreement isn’t enough to balance the market. On Wednesday, Russian President Vladimir Putin arrived in the UAE at the start of a rare foreign trip in which he was expected to talk about oil with regional leaders.

–With assistance from Yongchang Chin and Mia Gindis.

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