Share

Oil falls amid record US stockpiles

New York - Oil dropped as US crude supplies rose to an all-time high while investors await a meeting between OPEC and its allies that may signal whether they’ll extend output curbs.

Futures fell on both sides of the Atlantic, sending Brent to its lowest close since November. American crude output continued to rise along with inventories last week, an Energy Information Administration report showed on Wednesday. While OPEC won’t formally decide until May whether to prolong production cuts, officials will meet this weekend in Kuwait to discuss their deal’s progress.

West Texas Intermediate and Brent crudes dipped below $50 a barrel this month for the first time in 2017 as rising US inventories weighed on output cuts by the Organisation of Petroleum Exporting Countries and other producers.

 Saudi Energy Minister Khalid Al-Falih has said the group would extend the deal if oil stockpiles remain high. The Russian cuts are “slower than what I’d like,” Al-Falih said in an interview with CNBC March 7.

"There’s a lot weighing on the market and I believe it’s a matter of time before we move lower," John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy, said by telephone. "Saudi patience is being tried by Russia and others that aren’t abiding by the agreement."

WTI for May delivery dropped 34 cents to close at $47.70 a barrel on the New York Mercantile Exchange. Total volume traded was about 20% below the 100-day average. Prices are up 20% from a year ago.

Brent for May settlement fell 8c to $50.56 a barrel on the London-based ICE Futures Europe exchange. Its the the lowest close since November 30. The global benchmark ended the session at a $2.86 premium to WTI.

Crude supplies rose by 4.95 million to 533.1 million barrels last week, the EIA report showed on Wednesday. Prices tumbled upon the release of the data before erasing most of the loss as attention shifted to fuel stockpile gains. Gasoline inventories fell to 243.5 million barrels, while supplies of distillate fuel, which includes diesel and heating oil, slipped to 155.4 million barrels.

Oil-market news:

Libya’s crude production has rebounded to the level before clashes disrupted output three weeks ago and forced the OPEC nation’s two biggest oil ports to halt shipments.

Algeria’s state-run energy producer plans to boost crude-oil output by 14% in the four years to 2019 and invest billions of dollars in exploration projects. OPEC’s supply cuts are providing a windfall for producers of heavy crude from Western Canada and the Gulf of Mexico.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.07
-0.9%
Rand - Pound
24.07
-0.7%
Rand - Euro
20.56
-0.5%
Rand - Aus dollar
12.37
-0.2%
Rand - Yen
0.13
-0.8%
Platinum
899.20
+0.3%
Palladium
999.25
-0.3%
Gold
2,210.66
+0.7%
Silver
24.56
-0.4%
Brent Crude
86.09
-0.2%
Top 40
68,080
+0.6%
All Share
74,278
+0.5%
Resource 10
56,967
+2.4%
Industrial 25
103,572
+0.3%
Financial 15
16,456
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders