The United States has got a lot of crude oil on its hands right now.
According to data released by the US Energy Information Administration (EIA), stockpiles swelled by a further 4.95 million barrels to 533.1 million barrels.
That was near double the 2.8 million inventory build expected, and left stockpiles at the highest level on record. That’s a lot of crude, not only in absolute levels, but also based on current consumption levels.
“US oil stockpiles trended lower through most of last year because of the fall in US supply, but this trend is reversing as US oil production increases,” said Vivek Dhar, mining and 2 energy commodities analyst at the Commonwealth Bank. “US oil output lifted to around 9.1 million barrels per day (mbd) last week, and is now only around 0.5mbd be low peaks reached in June 2015.”
Even with murmurings about a possible extension to production cuts implemented by Opec and non-Opec members in the first half year, Dhar says that the risk to his average crude price of $50-60 per barrel this year appear slanted to the downside due to the ongoing lift in US supply. Brian Gibbons JerseyShare This