The build reflects the growing glut of refined products in the US market, which has led to lower margin and reduced demand for crude.
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“Frankly I’m not sure that OPEC really needs to freeze here given the supply and demand situation seeming to come into balance”, said Paul Crovo, a Philadelphia-based oil and equity analyst at PNC Capital Advisors.
The Paris-based agency, whose monthly oil market report is closely watched by the industry, said it predicts global production of crude oil will fall behind demand by nearly one million barrels a day from July through September.
Here & Now’s Jeremy Hobson speaks with business journalist Ali Velshi about the ramifications, and about what Turkey’s renewed relations with Russian Federation mean for oil markets.
The IEA predicted refiners would take a “hefty draw” in the third quarter as they burn through the world’s oil inventories.
The statement also said a July spike in Saudi oil output to a record 10.67 million barrels per day was due to summer demand and requests from customers.
US crude oil for September delivery settled up $1.78, or 4.3%, to $43.49 a barrel on the New York Mercantile Exchange.
At 1548 BST, West Texas Intermediate crude rose 2.1% to $42.63 per barrel and Brent edged up 2.2% to $45.06 per barrel.
The nation’s 40-year ban on crude oil exports was lifted on December 16, 2015.
The prevision goes against the recent forecast by the Organization of Petroleum Exporting Countries (OPEC) reported earlier today.
Prices soared more than four per cent Thursday in reaction to the minister’s comments, which were seen as a positive development in a market grappling with a supply glut. Now they warn of a “massive” amount of oil in storage that is keeping the crude oil prices down.
Increased production from both OPEC and non-OPEC countries inflated the oil glut in the markets by 800,000 BPD in July, IEA estimated.
Crude oil stocks as of August 5 were at 523.6 million barrels, up 1.1 million barrels on the week and 70 million on the year.
“At 523.6m barrels, U.S. crude oil inventories are at historically high levels for this time of year”, the Energy Information Administration said. It now expects output to average 8.73m barrels a day this year and 8.31m barrels a day next year, up from its previous forecast of 8.61m per day and 8.2m a day, respectively.
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“As long as oil holds US$40, we should be at the bottom”, Phil Flynn, senior energy analyst at Price Futures Group said.
