Published: Thu, February 08, 2018
Economy | By

Oil Prices Fall On Rising Crude Inventories

Oil Prices Fall On Rising Crude Inventories

These cuts have been somewhat offset by rising US oil production C-OUT-T-EIA, with output up 1 million bpd in the past year. Prices earlier rose after data from the American Petroleum Institute showed an unexpected drop in stockpiles.

The API was said to report USA crude stockpiles slid 1.05 million barrels last week, with storage also shrinking at tanks in the key hub of Cushing, Oklahoma. The EIA says USA crude production will rise to 11.18 million bpd.

Net U.S. crude imports USOICI=ECI fell last week by 60,000 barrels per day.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for March delivery traded up about 0.5% at around $63.67 a barrel, and it tumbled to around $63.15 after the report's release.

Domestic crude oil production in 2018 is also expected to rise by more than previously projected, the agency said in its monthly short-term energy outlook.

He said that "It is possible that the price of oil could go up to $80 per barrel in the next few months, but I am sceptical whether it can be sustained at those levels". Whether this is a blip or the beginning of a longer term decline in crude prices is still an open question. The spread, or difference, between West Texas Intermediate, the US benchmark for the price of oil, and Brent, the global benchmark, makes USA oil competitive in some markets. IEA data shows that OECD stocks fell of 600,000 bpd in the last three quarters of 2017, the largest since 1984.

The amount of rigs drilling for oil rose to 765 by late January, more than double the 316 that were in operation during 2016's production lull. "The market is going to try to determine if the crude draw offsets the distillate build heading into tomorrow's EIA report", said Phil Flynn, analyst at Price Futures Group.

The United Arab Emirates bought oil directly from the USA in December of previous year, Bloomberg News reported.

Crude oil prices followed major stock indices lower on Monday in what wound up being one of the worst selloffs on the Dow.

The White House today confirmed it was anxious about the United States stock market drop but insisted the fundamentals of the USA economy are strong as the stock markets declined.

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