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The last 48 hours has seen the crude price fall away, however this may be more of a reflection of where it has come from. The statement from Iraq, confirming oil from the south of the country would remain constant, has helped ease fears but looks likely to be a short-term measure.
Yesterday the Iraqi oil minister stated that next month would see an increase in the volume of oil the country exported. Considering the unstable situation inside the country, it was a bold comment but one the markets are willing to believe for the time being.
At the same time as these optimistic export figures were being stated, the US crude inventories expanded by 1.74 million barrels last week to leave a total reserve of over 388 million barrels.
The crude oil price is now no longer overbought following the last few days selloff. It looks likely that stability in Iraq will be the driving force for the price. If the Iraq government can maintain enough control over the country to avoid western assistance, then we may see this move weaken. However, any increase in western presence could trigger another run.