The price of oil dropped today after a report indicated a large increase in US crude inventories.
June Brent crude futures LCOc2 fell 27 cents to reach $69.19 a barrel, while the May contract LCOc1 fell 16 cents to reach $69.95. WTI futures CLc1 dropped 40 cents to $64.85 a barrel, reported Reuters.
American Petroleum Institute (API) on Tuesday reported a 5.3 million barrels increase in crude stocks in the week up to 23 March, negating the expectations of a drop of 430.6 million barrels.
Out of the last nine months, oil prices increased in seven months. The price had increased by 4% this year since late 2010.
Commerzbank’s Carsten Fritsch was quoted by Reuters as saying: “After it rebounded from its early week high, profit-taking is likely to have ensued.
“This was exacerbated by an appreciating US dollar and an unexpected 5.3 million barrel rise in US crude oil stocks last week, as reported by the API after close of trading yesterday.”
Energy Information Administration (EIA) is scheduled to publish official US inventory data today.
Saxo Bank head of commodity strategy Ole Hansen told the news agency: “From a seasonal perspective, rising crude oil stocks and falling product stocks are what can be expected at this time of year when refinery maintenance reduce demand for oil and the production of products.”
US oil production has grown by almost 25% in the last two years to cross ten million barrels per day, beating top exporter Saudi Arabia and almost touching Russia, the biggest producer generating around 11 million barrels per day.