SINGAPORE (Reuters) – Oil prices fell on Thursday after US crude inventories rose to the highest level since December 2017, due to concerns of an emerging global emergency, even though the potential for a cut of the offer from OPEC has prevented further dips.
A maze of crude oil pipes and equipment is seen with American and Texas flags flying in the background during a tour of the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, United States June 9, 2016. REUTERS / Richard Carson
West Texas Intermediate (WTI) US crude futures were $ 54.35 a barrel at 0534 GMT, 28 cents or 0.5 percentage points below their last agreement.
Brent crude oil futures amounted to $ 63.25 per barrel, down 23 cents, or 0.4 percent.
US crude oil inventories increased by 4.9 million barrels to 446.91 million barrels last week, said the Energy Information Administration (EIA) in a weekly Wednesday report. It was the highest level since December of last year.
The production of crude oil in the United States remained at a record of 11.7 million barrels per day (bpd), according to EIA.
"US inventory data … continued to show significant levels of supply, which stem from sustained US crude oil production," said Stephen Innes, Asia-Pacific's trading manager at the Oanda futures broker in Singapore.
Some analysts have warned that, despite high global production, oil markets have little unused capacity to handle unexpected supply disruptions.
However, Innes said that once the US bottlenecks, which he expected in 2019, were lightened, "the whole notion of a strict argument about global reserve capacity goes down well."
Many US and Canadian oil are also struggling to get to the market because production increases have exceeded pipeline expansions to handle the shipment of crude oil.
As a result, the Canadian federal government is considering a proposal from its main oil province of Alberta to share the cost of buying rail cars to move oil stuck in the region to refineries in the United States.
Meanwhile, the Middle East has dominated the Organization of Petroleum Exporting Countries (OPEC) and is concerned with the emergence of oversupply that could further lower prices.
To counter this, the producer group is evaluating the cuts in supply when it will meet again on 6 December, although some members, such as Iran, should resist any voluntary reductions.
"While it is said that OPEC and Russia may again agree on a production cut, the concern is that not all stakeholders will be able to reach an agreement," said William O & # 39; Loughlin, an analyst investments in Rivkin Securities in Australia.
"Saudi Arabia has hinted at a one-sided cut, but would like to be careful to annoy the United States since President Trump has expressed his desire to lower oil prices," he added.
On Wednesday Trump praised Saudi Arabia for recent oil prices and demanded that prices become even lower.
"Oil prices are falling in. Great, like a big tax cut for America and the world, have fun! … Thanks to Saudi Arabia, but let's go lower!", He tweeted Trump .
Reporting by Henning Gloystein; Editing by Joseph Radford and Christian Schmollinger