Crude Oil Still Under Pressure on U.S. Stockpile Rise
Investing.com – Crude oil prices remained under pressure on Thursday, as news of an unexpected increase in U.S. crude inventories overshadowed hopes that oil producers will extend their deal to reduce output.
The U.S. West Texas Intermediate crude December contract was down 35 cents or about 0.63% at a nearly two-week low of $54.98 a barrel by 09:50 a.m. ET (13:50 GMT).
Elsewhere, Brent oil for January delivery on the ICE Futures Exchange in London was down 42 cents or about 0.70% at $61.44 a barrel.
Prices came under pressure after the EIA reported on Wednesday that crude oil inventories rose by 1.9 million barrels last week, marking the second-straight increase and compared with analysts’ expectations for a decline of 2.2 million barrels.
The report also showed that domestic production rose by 25,000 barrels per day (bpd) to a record 9.645 million. Output has now risen by almost 15% since the most recent low in mid-2016, casting doubts over the past few months’ narrative of tightening energy markets.
Oil prices had been supported in recent weeks by optimism that oil producing countries will agree to extend an output cut at their meeting at the end of this month.
Under the original terms of the deal, OPEC and 10 other non-OPEC countries led by Russia agreed to cut production by 1.8 million barrels a day (bpd) for six months. The agreement was extended in May of this year for a period of nine more months until March 2018 in a bid to reduce global oil inventories and support oil prices.
Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.