Output by the world’s biggest exporter rose to 10.564 million barrels daily from 10.3 million. U.S. commercial crude oil inventories increased by 2.6 million barrels from the previous week.
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The price of a barrel of oil dipped below the $41 level on Wednesday, dragging the Canadian dollar briefly below 76 cents US in the process.
US West Texas Intermediate (WTI) crude oil already slumped over 4 per cent on Wednesday to hit a 6-1/2-year low as a huge unexpected stockpile build in the United States reinforced concerns about a growing global oil glut.
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Energy companies invested heavily in drilling over the past few years, when the price of oil was generally over $100 a barrel. Production in the U.S. averaged 9.4 million barrels in the four weeks ending August 14, up almost 11 percent from just a year ago, according to data released this week by the Energy Department.
Citigroup said WTI could fall to $32 a barrel, levels not seen since the throes of the financial crisis, pressured by excess supplies. Refinery utilization rates fell by 1 percentage points. It touched $47.73, the lowest since January.
Nymex reformulated gasoline blendstock – the benchmark gasoline contract – fell 1.8 per cent to $US1.53 a gallon. The European benchmark crude traded at a $6.13 premium to October WTI.
And stocks of gasoline or petrol recoiled by 2.7 million barrels, which was far heavier than an anticipated decline of 1.25 million.
“As we go into the next couple of months, crude oil demand is going to decline, which worries the market“, Andy Lipow, head of Houston consultancy Lipow Oil Associates, told AFP.
US inventory data was “the main catalyst for the big slide” in oil prices overnight, Edward Bell, Commodities Analyst, Global Markets & Treasury at Emirates NBD, told Gulf News by phone on Thursday.
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The EIA chose to lower its price expectations over concerns of the pace of economic growth in emerging markets, continuing supply growth, increases in global liquids inventories, and the possibility of increasing volumes of Iranian crude oil entering the market, the administration said in its most recent Short-Term Energy Outlook (STEO).
