The build was nearly three times more than the 3.6-million-barrel increase pegged by analysts as being realistic. Nationwide supplies probably rose by 3.4 million barrels, the Bloomberg survey shows before a report from the Energy Information Administration. However, it should be noted that outside the US, especially in China, demand for commodities in general is falling. Worldwide benchmark Brent crude is trading for $36.92, while West Texas Intermediate is going for $34.57.
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Oil prices ended up for a third straight day on Wednesday as buyers shrugged off record high US crude stockpiles to focus on an OPEC plan to freeze production, keeping alive the notion that market has bottomed from a near two-year selloff.
Last week, total USA crude inventories stood at 518 MMBO.
However, the market shrugged off the bigger-than-expected growth and honed in on the decline in production, which fell for the sixth week to 9.08 million barrels a day, and the drawdown in gasoline stocks, which fell by 1.5 million barrels, suggesting healthy demand.
Away from oil markets, precious metals returned to positive territory.
Oil prices edged higher on Wednesday (Mar 2) as speculation of a potential producer deal to limit output offset a jump in U.S. petroleum inventories. Resistance is now seen near the January highs at 37.25. But, he added, prices of over $40 a barrel “would prompt shale producers to reverse numerous production cuts that are supporting the rally”. As natural gas plunders to new multi-decade lows, and retail gasoline prices begin their seasonal pre-driving season ascent, 1000 cubic feet of natural gas is cheaper than a gallon of gasoline.
But the price reaction to these first estimates also remained limited due to ongoing discussions between the Organization member countries of the Petroleum Exporting Countries (OPEC) and non-OPEC countries on a production freeze its levels January.
Given that, he expects WTI oil prices to see “another swing under $30 one more time by end of the month”.
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Commenting this week on current agreement President Vladimir Putin said: “On the whole, an agreement was reached that we will keep oil output at the January level”.
