On Wednesday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. commercial crude inventories for the week ending on February 19 rose by 3.5 million barrels from the previous week.
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-Production declined for a fifth week to 9.1 million barrels a day; gasoline inventories dropped by 2.2 million barrels from the highest level since January 1990.
Brent crude futures LCOc1 were down 37 cents at $34.04 a barrel at 1445 GMT, while U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 48 cents at $31.67 per barrel.
Oil prices fell today on renewed concerns over weak demand and an oversupplied market, traders said.
“The market lacks drivers so USA crude oil inventory is still the main thing traders look at it. The latest figure clearly shows that the global glut isn’t going anywhere”, said Barnabas Gan, an OCBC energy analyst, who tipped prices to remain range-bound in the near term. Prices won’t recover until the second half of next year at the earliest, Mexican Energy Minister Pedro Joaquin Coldwell said at a conference in Houston, estimating that the market is oversupplied by about 2 million barrels a day. With the moderate gains, USA crude futures closed above $32 a barrel for the first time in three weeks. The European benchmark crude was at a premium of $2.33 to WTI after reaching $2.37 earlier, the widest gap since December 14.
Officially, the US government reported on Wednesday that Cushing added 333,000 barrels last week to reach 65.1 million for a fourth straight week of record highs. US production continues remains far below its June level of 9.5 million bpd when it soared to its highest level in at least 40 years.
-Mexico is willing to participate in a meeting with global producers to discuss a potential output freeze, Minister Coldwell said in Houston.
Oil has slid from more than $100 a barrel since mid-2014, pressured by excess supply and a decision by the Organization of the Petroleum Exporting Countries to abandon its traditional role of cutting production to boost prices.
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Top oil producers Russian Federation and Saudi Arabia agreed to freeze oil production at January levels last week, provided other oil exporters joined in. Global economic sanctions on Iran were lifted last month.
