Crude Tumbles as Rising Supply Counters Bullish Demand Outlook

Futures in New York tumbled 1.7 percent Thursday. While Goldman Sachs Group Inc. forecasted strong global consumption growth, crude production and stockpiles in the U.S. climbed higher in the latest inventory report. A strengthening dollar also pushed crude lower.

The Organization of Petroleum Exporting Countries and its partners including Russia continue to trim output as promised. OPEC shipments will fall by 230,000 barrels a day in the four weeks to March 24, according to tanker-tracker Oil Movements. Saudi Minister of Energy and Industry Khalid Al-Falih said in a Bloomberg Television interview that the deal will evolve in 2019 and the group will do what it needs to in order to preserve oil market stability.

Yet, worries about growing U.S. shale output as West Texas Intermediate crude futures linger in the $60s puts a limit on prices rallying higher. Energy Information Administration data released Wednesday showed weekly nationwide crude output climbed to a fresh record last week, while crude inventories rose to the highest since December. Reports that data-provider Genscape Inc. posted a rise in inventories at the Cushing, Oklahoma storage hub last week also added to downward pressure.

The Bloomberg Dollar Spot Index climbed as much as 0.6 percent. A stronger U.S. currency reduces the appeal of dollar-denominated raw materials as an investment, pushing crude lower.
more at:  https://www.bloomberg.com/news/articles/2018-03-08/oil-halts-losses-after-u-s-stockpiles-gain-less-than-expected