Oil price rises despite a hike in US stockpiles

 
Billy Bambrough
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A flame from a Saudi Aramco (the nationa
Saudi has been working to broker a deal with both Opec and non-Opec countries to stabilise prices (Source: Getty)

Oil bounced back late last night after losing ground earlier in the day.

The rise was due to Venezuela reaffirming a mid-March meeting of oil producers that would include Saudi Arabia, Russia and Qatar.

Saudi has been working to broker a deal with both Opec and non-Opec countries to stabilise prices that have slumped 70 per cent since the summer of 2014.

In late evening trading the price of US West Texas Intermediate was up around a two dollars on the day at $32.96 a barrel, while Brent crude was going for $35.07.

Previously oil was sent lower after US crude inventories posted fresh record highs and added to fears that the global supply glut will take longer to clear than previously thought.

Stockpiles at the key US hub of Cushing, Oklahoma rose by more than 503,000 barrels to hit 67.5m barrels in the week until 24 February, according to market intelligence firm Genscape.

Official data earlier in the week put inventories for the entire US at all-time highs of over 507m barrels.

The oil price was given a boost on Wednesday after US petrol stockpiles showed a surprise decline of 2.2m barrels over the week, suggesting strong demand.

Despite stockpiles continuing to rise there are increasing signs that low prices are finally beginning to bite.

“At this time last year, US production was still climbing higher but with oil now trading a full $20 lower things are really different this time around,” consultancy JBC Energy said in a note to clients.

The oil price leapt by around 10 per cent at the beginning of the week on rumours Saudi Arabia would be able to negotiate a deal with Russia to cut output, though this was ruled out by the Saudi oil minister at an industry conference on Tuesday.

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