Crude oil prices faced the risk of going down again if necessary measures are not put in place. For the last two years, oil prices have been declining and we have seen the impact it had on the global economy. The nightmare was to be over as for the last one month, we have seen oil prices rebound. However, what we have seen this week reminds as that it is easier to go down than to climb higher. The decline in crude oil prices seen this week has been termed as the first weekly decline since mid-February. The decline has been associated with the rise of US crude stockpiles. We can hope that the meeting by oil producers in Qatar on April will achieve output cut.
Oil slipped for a third day in New York, continuing its retreat from a three-year high, on estimates that U.S. crude stockpiles increased last week.
“Strong U.S. crude supply growth and deteriorating inventory dynamics” could “trigger a sentiment shift and unsettle the record speculative length in the oil market,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.
Ten consecutive weekly declines in American stockpiles had helped crude breach $66 a barrel for the first time since December 2014. Oil’s fifth consecutive monthly gain has also been driven by a weaker dollar amid conflicting remarks on the currency from President Donald Trump and his top officials.
U.S. crude stockpiles climbed by 3.23 million barrels last week, the American Petroleum Institute was said to report, before Energy Information Administration data on Wednesday. Meanwhile, American oil production climbed to 9.88 million barrels a day in the week ended Jan. 19, the highest level in weekly EIA data since 1983.
Gasoline inventories rose by 2.69 million barrels last week, while distillates fell, according to the API report. Front-month gasoline futures on the Nymex are set for a 4.7 percent gain in January, a second monthly increase, while diesel futures are headed for a 0.4 percent drop to $2.0683 a gallon this month, ending a sixth consecutive monthly advance.
more at: https://www.bloomberg.com/news/articles/2018-01-31/oil-extends-drop-below-64-as-industry-data-show-stockpile-gain