The EIA said stockpiles at the Cushing, Oklahoma delivery hub for US crude futures rose 1.5 million barrels to 56.9 million barrels.
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Oil prices have plunged in the past year as ample supplies around the globe overwhelmed demand for crude. “Macro headwinds remain, crude oil inventories are building”, Morgan Stanley said.
Weighing on oil prices is the strengthening in dollar as investors are increasingly optimistic that the Fed will raise interest rates at the December meeting, said Michael Poulsen, oil analyst at Global Risk Management.
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Multiple attacks in Paris on Friday killed more than 130 people, prompting France to launch air strikes in Syria against Islamic State, which claimed responsibility for the attacks.
“Despite a nearly 2 million barrel per day increase in demand, oil stocks in the OECD countries grew to a record level of almost 3 billion barrels at the end of September”.
Crude oil prices snapped a streak of declines that followed a shift to market fundamentals following last week’s terrorist attacks on Paris and Beirut.
Money managers cut their net long US crude futures and options positions to the lowest in three months during the week to November 10, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday. In the London-based Intercontinental Exchange (ICE), Brent crude futures were trading in green, representing an increase of 48 cents at $44.95 per barrel. “We just have to wait and see what the reaction of the market will be if there is a reduction in crude oil supplies from the Middle East”.
At about 1230 GMT, USA benchmark West Texas Intermediate for delivery in December was down 40 cents at United States dollars 41.34 per barrel.
While oil markets remain jittery, traders are hoping that the API data is confirmed by the US Department of Energy’s weekly stock report due to be announced later today.
An analyst said the oil market continues to seek storage solutions but with the prices for January 2017 around $6 per barrel more than those in January 2016, it is far too low for floating storage to be attractive as the costs of freight must also be included.
Oil prices have dropped more than 60% since June past year as high production and inventories have coincided with an economic slowdown in Asia, particularly in China but also Japan, which slipped back into recession in the third quarter.
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Supplies of distillate fuel, the category that includes diesel and heating oil, fell 791,000 barrels to 140.3 million, leaving stockpiles 22 percent higher than at the same time previous year.
