Inventories rose by 4.22 million barrels last week, keeping supplies more than 100 million barrels above the five-year seasonal average, according to data from the Energy Information Administration.
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The world is awash with oil, as excess supply has reached record levels despite prices collapsing by almost half over the a year ago.
The global Energy Agency said there was a record 3 billion barrels in tanks worldwide. “Supply is not going anywhere, there’s tons out there and the market feels heavy”. Although the sharp drop in oil prices is a result of oversupply rather than a lack of demand, fears surrounding the health of the global economy are keeping investors on edge.
“Bears” in financial market parlance are investors willing to bet on falling prices.
Brent crude oil fell below $45 a barrel for the first time since August.
The Paris-based body, which advises developed countries on energy policy, says it expects oil prices to return to $80 per barrel in 2020, with further increases after that.
ANZ also said that big price rises this year were unlikely: “A year end recovery in commodity prices remains unlikely with a stronger US$ and EM (emerging market) growth concerns”.
The EIA estimated that production rose by 25,000 barrels a day last week to 9.2 million barrels a day.
Commerzbank analysts said the renewed price weakness ratchets up the pressure on Opec producers, especially kingpin Saudi Arabia.
“We are following the market day in and day out, month in and month out we see that 2016 is really producing a few positive results”, Badri said in Abu Dhabi. The EIA’s weekly update on natural-gas supplies will be released on Friday, a day late because of Wednesday’s holiday. In its monthly oil market report, the agency said that increasing inventories of crude and oil products worldwide may worsen the overhang into 2016.
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Investors barely budged. The price of Brent crude oil was relatively flat at $47.30 slightly after 11 a.m., and the price of West Texas Intermediate crude was up 0.7% to $44.21.
