OPEC, which supplies about 40 percent of the world’s crude, has pumped above its 30 million-barrel-a-day quota for more than a year, according to data compiled by Bloomberg.
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Inventories at Cushing, Oklahoma, the delivery point for the U.S. contract added 0.32 million barrels to 57.1 million barrels.
“The numbers were a total surprise with crude showing a build when the whole Street was forecasting a draw”, Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York, said.
U.S. benchmark distillate futures, the ultra-low sulfur diesel contract, also ended lower on Thursday. Brent was down 35 cents at US$46.81 a barrel.
U.S. crude futures were trading at $40.69 per barrel at 0024 GMT, levels not seen since the peak of the global financial crisis of 2008/2009.
Yet, crashing oil prices still have consequences, and according to the Federal Reserve Open Market Committee Minutes, it may be a reason the Fed can’t raise rates.
Gasoline stocks dropped 2.7 million barrels last week, while analysts expected a decline of 1.6 million barrels. The rise in US inventories was unexpected since oil supplies typically fall in the spring and summer because refiners process more gasoline to meet driving demand.
Overall, aggregate crude oil production at the seven key shales is expected to drop 3.3% in September compared to their July levels.
“Global equities are a negative price driver for the oil and broader commodity complex”, Dominick Chirichella, senior partner at Energy Management in New York, said in a note.
Brent for October settlement was little changed at $48.80 a barrel on the London-based ICE Futures Europe exchange. Refinery utilization in the U.S. Midwest region fell to 92.2 percent last week, the biggest weekly drop in eight months. He added that, although he could see oil prices rebounding in the coming weeks, he thought they would remain low into next year.
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Since June, US crude oil production decreased by over 250,000 barrels per day (bpd). In the latest sign of Saudi Arabia’s attempt to secure market share, Egypt said on Thursday it agreed a $1.4 billion three-month oil products deal with state-owned Saudi Aramco to begin in September.
