Oil prices decline due to build in US crude inventories

28 November 2019 (Last Updated November 28th, 2019 12:12)

Oil prices have slipped for a second day after official data revealed an increase in US crude and gasoline stockpiles.

Oil prices decline due to build in US crude inventories
Brent crude futures declined 18 cents at $63.88 a barrel, reported Reuters. Credit: skeeze from Pixabay.

Oil prices have slipped for a second day after official data revealed an increase in US crude and gasoline stockpiles.

Brent crude futures declined 18 cents at $63.88 a barrel, while US West Texas Intermediate (WTI) crude fell 24 cents to $57.87 a barrel, reported Reuters.

Data released by the Energy Information Administration (EIA) highlighted a 1.6 million barrels (mbpd) rise in US crude inventories last week due to a record 12.9mbpd rise in production. EIA further reported that refinery runs slowed and gasoline inventories witnessed 5.1 million barrel increase.

OANDA senior market analyst Jeffrey Halley said: “Stubbornly high US crude inventories have seen oil prices ease in Asia today.

“Dips in the spot market are likely to be limited for now as the US Thanksgiving holiday mutes activity.”

This week, oil prices increased due to expectations that the world’s two biggest nations, China and the US, are soon to sign an interim deal, as part of their attempts to end the 16-month old trade dispute.

Forces in eastern Libya said that they had driven rival factions from El Feel oilfield which has a 70,000bpd capacity, after attacking the area with air strikes. This led to a halt in production at the field and raised concerns on supply.

Baker Hughes reported that shale companies in the US reduced the number of drilling rigs for a straight twelfth month. The companies cut three oil rigs this week reducing the total rig count to 668, Baker Hughes said in its report.