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Crude oil prices take it on the chin

World Bank pessimism and U.S. industrial decline pull the price of oil lower.

By
Daniel J. Graeber
Weak data on U.S. industrial productivity and pessimism from the World Bank sends crude oil prices lower as producers get ready to review output at a weekend meeting in Doha. File photo by Monika Graff/UPI
Weak data on U.S. industrial productivity and pessimism from the World Bank sends crude oil prices lower as producers get ready to review output at a weekend meeting in Doha. File photo by Monika Graff/UPI | License Photo

NEW YORK, April 15 (UPI) -- Pessimism from the World Bank, coupled with jitters ahead of a weekend meeting for oil producers in Doha, pushed the price of crude oil sharply lower Friday.

Panelists gather at the World Bank headquarters late Friday in New York to address how lower crude oil prices are impacting the global economy.

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"Despite low interest rates, global growth has remained low driven by a simultaneous slowdown in most emerging markets, falling commodity prices, and flagging trade and capital flows," a statement from the World Bank issued before the meeting read.

Early this week, the International Monetary Fund said the baseline forecast for global economic growth this year was a "modest" 3.2 percent, a forecast that's 0.2 percent below its last estimate from January. On Friday, the U.S. Federal Reserve said industrial production declined 0.6 percent in March for the second straight month of losses. First quarter industrial production in the United States was 2.2 percent lower year-on-year. Mining and utilities are behind much of the loss.

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After a strong rally to start the week, crude oil prices are pulling back from recent gains. Brent crude oil was down by 2.6 percent to $42.71 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, is threatening the $30 range to lose 2.6 percent at the open to $40.40 per barrel.

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Crude oil prices started a three-day surge last week Friday after ministers from members of the Organization of Petroleum Exporting Countries expressed optimism about support for a deal at weekend meetings in Doha to hold output steady at January levels.

This week, the International Energy Agency said that, if an agreement to freeze production is reached, "the impact on physical oil supplies will be limited."

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Crude oil prices are low by recent historical standards because the market is oversupplied. Total crude oil production from OPEC members in January was about 0.5 percent higher than March.

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