SINGAPORE (Reuters) – Oil prices fell on Thursday after US commodities swelled to their highest level since December 2017, with…
SINGAPORE (Reuters) – Oil prices fell on Thursday after US commodities swelled to their highest level since December 2017, with concern for an emerging global glut, although the potential for a supply-mindedness of OPEC prevented further drops.
A maze of crude oil pipes and equipment is seen with American and Texas flags flying in the background during a tour of the Energy Department at the Strategic Petroleum Reserve in Freeport, Texas, USA, June 9, 201
6. REUTERS / Richard Carson
US West Texas Intermediate (WTI) crude futures were at $ 54.35 a barrel at 0534 GMT, 28 cents, or 0.5 percent during their last settlement.
Future Brent crude oil futures were $ 63.25 a barrel, down 23 cents, or 0.4 percent.
US. Commercial crude oil inventories increased by 4.9 million barrels to 446.91 million barrels last week, Energy Information Administration (EIA) said in a weekly report Wednesday. It was the highest level since December last year.
US. Crude oil production remained at record 11.7 million barrels per day (bpd), MKB said.
“US. inventory data … continued to show significant supply buildings, which are on the back side of US crude oil production, “said Stephen Innes, Asia-Pacific Trade Manager at Oanda Singapore, Singapore.
Some analysts have warned that despite the high global output
Innes said, however, that once the American pipeline bottlenecks were relieved, which he said he expected in 2019, “the whole idea of a tight global reserve capacity argument goes down the drain.”
The oil markets have little extra capacity to handle unforeseen delivery disturbances. ] A lot of American and also Canadian oil are struggling to enter the market, as production increases have surpassed pipeline extensions to handle the supply of crude oil.
Therefore, Canada’s federal government is considering a proposal from its main oil producing province in Alberta to share the cost of buying stat wagons to move oil to the region to refineries in the United States.
At the same time, the Middle East-dominated Organization for Oil Producing Countries (OPEC) is concerned that there is a delivery gluten that can further reduce prices.
In order to counteract this, the producer group is considering cuts when the next one meets December 6, although some members, like Iran, are expected to resist any voluntary reductions.
“Although it is said that OPEC plus Russia may once agree on a cut in production, it is worrying that not all relevant parties will be able to agree on an agreement,” said William Loughlin, investment analyst at Australia Rivkin Securities.
“Saudi Arabia has suggested a one-sided cut, but it will be careful not to annoy the United States, because President Trump has asked for his wish for lower oil prices,” he added.
Trump on Wednesday celebrated Saudi Arabia over recent oil prices and demanded lower prices.
“Oil prices are getting lower. Good! Like a big tax cut for America and the World. Enjoy! … Thank you for Saudi Arabia, but let’s go lower! “Trump Tweeted.
Reporting by Henning Gloystein; Editing Joseph Radford and Christian Schmollinger
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