Oil prices have dropped due to reports of an increase in US inventories helping nullify the impact of an output cut by OPEC and other prominent producers.

Benchmark Brent crude LCOc1 and US light crude CLc1 fell by 40 cents and were trading at $55.04 per barrel and $52.78 respectively, reported Reuters.

American Petroleum Institute (API) released its weekly inventory data that revealed that US stock of crude, gasoline and diesel increased more than estimated.

Official figures from the Energy Information Administration (EIA) will be released later.

"This output cut could prove ineffective in bolstering prices if the US continues to increase production."

Oil prices began to increase after OPEC members and other key producers started production cuts at the beginning of this year.

However, this output cut could prove ineffective in bolstering prices if the US continues to increase production.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

From mid-2016, oil production in the US grew by nearly 6%.

New US President Donald Trump also promised to support the domestic oil industry, forcing trade analysts to revise their predictions for 2017.

According to Goldman Sachs, a new border-adjusted corporate tax currently presented before the US House of Representatives could boost production.