Growing US Crude Inventories Push Oil Prices Lower

Oil prices traded lower during the trading session on Thursday in Asian markets. This is after the U.S. Energy Information reported that the crude oil inventories in the country have reached three million barrels for the week that ended in February 23.

Previous Oil Price Movement Outlook

The sudden rise in U.S. crude inventories comes after some of the markets have speculated that the ongoing production cuts by the Organization of Petroleum Exporting Countries have finally offset the high production in the U.S.

U.S. crude production which has been on extremely high levels not seen in years have affected the efforts of the OPEC to avoid a global oversupply. The OPEC have also extended its production cuts by another nine months until the end of the year. This is also to help overall oil prices higher back to more normal levels not seen in years.

Oil prices which recovered greatly at the beginning of the year suddenly declined by February. Output in the U.S. crossed then million barrels per day in February overtaking Saudi Arabia as the second biggest oil producer in the world.

Crude oil prices traded by as much as $65 to $69 per barrel last January slipped down back to around $60 to $61 per barrel but otherwise remained above the $60 per barrel level.

Last week, oil prices recovered on a slight decline in U.S. crude inventories. For the week that ended in February 16, the American Petroleum Institute along with the Energy Information Administration stated a draw in their weekly production. A decline of 1.6 million barrels was then reported. This is compared to initial expectations that there would be a rise of 1.8 million barrels in the weekly production. 

Brent crude futures have then traded above $65 per barrel while the U.S. West Texas Intermediate traded by almost $62 per barrel.

Latest Oil Price and US Crude Output

Following an all-time high being reached by the U.S. production last November, most recent data have revealed that U.S. crude have reached above 10 million barrels per day again last month.

Despite a slight decline last week, the EIA have recently reported a build of 3 million barrels for the week that ended February 23. This was higher than most analyst expectations of a 1.2 million barrel buildup in crude inventories. Gasoline stockpiles have also risen by 2.5 million barrels at the same week compared to the 300,000 barrel build during the past week.

Most global crude prices were down on Thursday with the London Brent crude for May delivery slipping down by 16 cents to trade at $64.57 per barrel. The U.S. West Texas Intermediate also traded down by 11 cents at $61.53 per barrel. Crude oil prices are expected to end lower by next week as the EIA delivers another set of weekly production data.

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