Oil prices have dropped as a result of an increase in exports, which negated gains made earlier in the day on the back of a decrease in US crude stockpiles.
US West Texas Intermediate (WTI) crude futures registered a fall of 3¢ to reach $62.74 a barrel, while Brent crude futures decreased 2¢ to trade at $66.37 a barrel, according to Reuters.
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Data from the Energy Information Administration (EIA) revealed that US crude stockpiles were down 1.6 million barrels in the week ending 16 February, totalling 420.48 million barrels.
The fall in inventories was not significantly affected by a seasonal slowdown in demand at the end of the northern hemisphere winter season.
US investment bank Jefferies was quoted by the news agency as saying: “A counter-seasonal draw should always be taken bullishly, as it has been, but this week’s net crude imports were very low.”
Several analysts posited that the drop in stockpiles was caused by the shape of the oil price curve.
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By GlobalDataFutures brokerage AxiTrader chief market strategist Greg McKenna was quoted by the news agency as saying: “Part of that [inventory fall] is the shape of the oil curve, which makes it uneconomic to store product.”
Traders tend to sell rather than store oil, as the backwardation shape of the price curve offers better rates for immediate sale than those for later sale.
Data released by the EIA also determined that crude exports breached the 2 million barrels per day (bpd) last week.
The surge in exports contributed to net imports falling to less than 5 million barrels per day, which represents the lowest level since 2001.
US crude output remained at 10.27 million barrels per day.
