The Energy Information Administration sunk oil markets deeper into despair reporting a build of 13.8 million barrels for commercial crude oil inventories in the U.S. Total commercial inventories are at 508.6 million barrels, above the upper limit for the season.
A day earlier, the American Petroleum Institute reported the second-largest weekly inventory build ever in the history of records, at 14.227 million barrels, versus expectations of a 2.38-million-barrel increase.
Last week, both EIA and API reported substantial builds in inventories, with the EIA figure at 6.5 million barrels for the week to January 27, exceeding API's estimate of 5.8 million barrels in additions to the stockpiles.
API's report from yesterday seems to have prompted comments from OPEC officials about the progress of the production cut agreement and suggestions that the agreement may have to be extended beyond the June 30 deadline initially agreed, as growing production in the U.S. limits the upward potential of oil prices.
EIA said that in the week to February 3 refineries processed 15.9 million barrels of crude daily, operating at 87.7 percent of capacity. Gasoline production averaged 9.8 million barrels a day - a weekly increase - while inventories fell by 900,000 barrels. In the previous week, gasoline inventories went up by 3.9 million barrels.
It seems that no matter how many encouraging updates come from the OPEC-Russia camp prices are constrained by other factors, chief among them production and inventory figures coming from the U.S. Related: Expensive Middle East Crude Could Lose Market Share To U.S. Shale
The most recent from OPEC, besides the remarks about a deadline extension for the cut, was the announcement that the specially set up committee that will monitor compliance, will release its first production calculations for January on February 17.
Qatar's Oil Minister Mohammed Al Sada said that the five-member committee, chaired by Kuwait, will use six difference sources for production figures.
At the time of writing, WTI was trading at US$51.74 a barrel, while Brent crude was at US$54.78 a barrel.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
Comments
Shale can't make money at $50. They can borrow, sell stock, drill, pay high salaries, declare bankruptcy, change names and do it again, but they can't make money.