U.S. West Texas Intermediate and international benchmark Brent crude oil futures are in a position on Friday to post their biggest weekly loss of the year. Most of the loss can be attributed to a steep decline on Thursday, which produced the worst single-day performance in 2019.
Traders are saying that the sell-off is being fed by concerns over rising U.S. stockpiles and worries that the U.S.-China trade standoff has finally hit the U.S. economy.
Rising U.S. Stockpiles One Bearish Factor
Surging U.S. inventories weighed heavily on U.S. West Texas Intermediate and international benchmark Brent crude oil futures throughout the week.
A jump in U.S. crude inventories primarily caused by low refinery runs helped drive prices lower. According to the Energy Information Administration (EIA) weekly inventories report, U.S. crude stockpiles soared to their highest levels since July 2017.
The EIA data showed commercial U.S. crude inventories rose by 4.7 million barrels in the week ended May 17, to 476.8 million barrels. The government also reported that U.S. crude oil production climbed by 100,000 barrels per day (bpd) to 12.2 million bpd. Last month, production hit a record 12.3 million bpd.
Weak refinery demand and the planned sale of U.S. strategic petroleum reserves (SPR) into the commercial market have also set up crude for its worst weekly performance in 6 months.
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