Oil slips as USA stockpiles set record despite cuts

Analyzing What Crude Oil’s Contango Indicates

Analyzing What Crude Oil’s Contango Indicates

On the other hand, Goldman Sachs predicted that although crude oil inventories in the USA are expected to rise, the global oil market is showing signs of tightness and will continue to see crude stocks draw down.

Production averaged nearly 9 million barrels per day (bpd) in the four weeks to February 24, according to the latest weekly estimates published by the Energy Information Administration. April WTI was changing hands around $53.76, up 11 cents.

While Saudi Arabia's February crude shipments fell again, indicating OPEC's top producer is cutting deeper than it pledged, US stockpiles expanded by 1.5 MMbbl last week.

Oil prices were also pressured by the US dollar rising on increasing odds of an interest rate rise by the Federal Reserve as early as later this month.

Though the addition was below analysts' expectations of a 3.1 million barrel increase, successive eight straight weeks of addition have kept oil prices under check. Gasoline inventories decreased by 0.5 million barrels last week, while distillate fuel inventories decreased by 0.9 million barrels last week.

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Those states say it's a form of government "harassment" to request methane information from companies producing the commodities. This story also appears in Energywire .

So far, OPEC compliance with its production cut goals appears to have been good, with cold weather and natural declines adding to reductions from non-OPEC producers, resulting in Russian Federation being ahead of schedule.

Brent for May settlement fell 39 cents to $55.97 a barrel on the London-based ICE Futures Europe exchange.

The cartel also faces a challenge from USA producers, who have lately flooded the market with supply.

According to data for the month of January, OPEC is in nearly full compliance with the deal. "We hit a year ago, just about the all-time highs and storage in the USA and globally - 512 million barrels in the USA, 3.1 billion barrels globally - and we've come off of that but only about 5% with the seasonal adjustment in there, so it's really not all that impressive".

However, if oil prices fail to rally higher, constrained by the higher U.S. shale oil production, it is unlikely that Saudi Arabia will continue to carry the production cuts on its shoulders for another six months.

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