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Cost of oil reaches yearlong high

In late April, oil prices reached a 2016 high, with Brent crude rising $1.03 (£0.70) to a high of $46.77 (£32.02) per barrel, whilst WTI futures rose 86 cents to $44.90 (£30.74) per barrel.

The buoyancy in the market was due to a heady combination of a drop in oil output and a weakening dollar.

Brent crude oil has now made gains of almost 20% in April, which represents its biggest one-month jump in the last 12 months.

A couple of weeks before this rise, which took place on the morning of 26 April, there were worries that a long-term price rally would be ruined by the failure of the biggest oil producers to come to an agreement on an oil production limit.

However, a major selloff did not occur, and forecasts from the International Energy Authority and BP, among others, have stated that a rebalance in oversupply will have allowed investors to feel greater confidence in the market.

The oil market was further propped up with the American Petroleum Institute’s recent report that the United States’ stockpile of crude oil had been diminished by 1.1 million barrels in the week before the 25 April, which was good news because analysts had predicted that stockpiles would increase by around 2.4 million barrels.

The apparent increasing health of the oil market will be good news for oil companies like Fuchs Petrolub, which is known for products like Fuchs WSP 783-L and will be watching the market very closely.

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