Oil Prices Rebound After EIA Reports Build In Crude Inventories

Adjust Comment Print

The EIA said weekly United States crude production hit a record high per day last week of nearly 10.4 million barrels.

At just below 11 million bpd, only Russian Federation now produces more crude oil than the United States, although the International Energy Agency (IEA) expects even this to change as the United States is set to surge past 11 million bpd by late 2018.

Prices briefly pared losses after data from the Energy Information Administration said USA crude inventories rose by 2.4 million barrels in the last week, compared with analysts' expectations for an increase of 2.7 million barrels.

Oil futures were lower Thursday morning as rising USA production and a stronger dollar pulled NYMEX crude toward $60/b. US West Texas Intermediate (WTI) crude futures were at $61.29 a barrel, up 14 cents, or 0.2 per cent. WTI also fell by more than 2 per cent the previous session.

U.S. oil prices remained under pressure from expectations that weekly crude inventory data would show a second straight rise.

With the inventories reports out of the way, traders are likely to go back to focusing on the outcome of the tariff debate and whether Trump will implement his plan to sanction imports of steel and aluminum, and if other countries will take retaliatory action. Since the start of the year, there has been only one week featuring a decline in gasoline stockpiles, while the total build since then stood at 17.8 million barrels.

More news: Man shoots and kills himself in front of White House

On the demand side, United States bank Goldman Sachs said in a note to clients dated March 7 that the outlook remained for healthy growth, despite recent signs of a slight economic slowdown.

Should this forecast come to pass, OPEC would be hard pressed to continue pumping less oil than before and even that won't guarantee oil prices remaining at comfortable levels for the cartel's members.

Crude inventories rose by 5.661 million barrels last week to 426.880 million barrels, data from the American Petroleum Institute showed on Tuesday.

Next year, average output will climb to 11.27 million, up from a prior forecast of 11.18 million, the report showed. The global benchmark traded at a $3.38 premium to May WTI. The U.S. already passed top exporter Saudi Arabia late a year ago.

Gary Cohn, economic adviser to US President Donald Trump, seen as a bulwark against protectionist forces within the government, said on Tuesday he was resigning, triggering a more than 1% fall in S&P 500 futures on Wednesday.

Comments