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February 25, 2015

Oil falls towards $61 on increased US crude stocks

The price of Brent crude oil dropped towards $61 per barrel on Thursday after an increase in US crude stocks.

By admin-demo

The price of Brent crude oil dropped towards $61 per barrel on Thursday after an increase in US crude stocks.

Reuters reported that Brent crude dropped 21 cents to $61.42 a barrel and US crude fell 34 cents to $50.65.

Prices were supported by improved views on worldwide oil demand from the Saudi Oil Minister Ali al-Naimi and better factory activity data than expected from China.

"Without US crude production making adjustments, we strongly believe that prices will not recover yet."

Data from the Energy Information Administration (EIA) revealed that US crude stocks increased 8.4 million barrels last week to 434.1 million barrels, a seasonal record high for the seventh continuous week, as refineries cut production.

The US refinery strike is in its fourth week, with negotiations to end it not expected to restart this week.

Phillip Futures analysts were quoted by the news agency as saying: "With the continued refinery strikes, as well as a strong production from the US, it comes as no surprise that inventories increase.

"Without US crude production making adjustments, we strongly believe that prices will not recover yet."

Adding to al-Naimi’s comments that oil demand is increasing and markets are calm, another senior Gulf OPEC delegate said demand is anticipated to grow strongly in the second half of 2015 as the worldwide economy picks up.

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