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  • US oil takes a step backwards as American crude inventories continue to outstrip demand.
  • OPEC is meeting soon to discuss output limits, which will give Saudi Arabia a chance to blame the US for rising prices.

Crude oil prices peaked at a near-term high of with WTI tapping into 70.40 on Tuesday, but was unable to make a challenge of last week’s high of 71.25 after US oil inventories showed yet another surprise build-up in their barrel counts yesterday.

US crude stocks increased by 1.2 million barrels according to the American Petroleum Institute (API), sharply reversing the market forecast of -2.7 million barrels, raising prospects for a widening premium in the Brent versus WTI with crude runs worsening in Europe and Asia.

OPEC ministers are also slated to meet this Sunday, but no decisions or adjustments are expected to be made while the OPEC group meets to discuss output policies and their compliance.

Saudi Arabia has mentioned several times recently that they have no desire to push oil prices over $80/barrel, a move higher may be unavoidable as US sanctions on Iran are set to come into effect beginning November 4th.

WTI levels to watch

With WTI falling back towards 69.50, buyers will be scrambling to keep prices bolstered from yesterday’s late swing low of 69.30, with a floor underneath current prices from the weeks triple-touch near 68.50, while any bullish plays will have to clear last week’s high at 71.25.

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