Oil price sinks as Keystone shutdown fails to prevent US stockpile build at key Cushing hub

 
Billy Bambrough
Follow Billy
Oktoberfest Opening
The oil price has been up and down over the last few sessions (Source: Getty)

The price of a barrel of oil has slid by around two per cent today after the shutdown of the Keystone pipeline last week failed to hold back the rising tide of oil.

Inventories at the Cushing, Oklahoma delivery hub added 255,804 barrels according to market intelligence firm Genscape.

Brent crude was trading at $38.81 at the London market close, while US West Texas Intermediate was trading at $36.85.

The TransCanada Keystone crude pipeline, that moved 590,000 barrels per day to Cushing and Illinois, has been dry since Saturday due to a potential leak.

Genscape reckons the shutdown did bring down Cushing stocks by 481,485 barrels in the five days to Tuesday but failed to offset total inflows for the week.

Yesterday the oil price bounced by five per cent after a report from the Energy Information Administration showed US stocks fell by 4.9m barrels in the week to 6 April, beating analyst expectations.

Investors continue to hope the Organization of the Petroleum Exporting Countries (Opec) and Russia are able to come to an agreement to freeze production at January levels when they meet in Doha on 17 April.

Traders are increasingly sceptical that even if a deal can be reached, which seems pretty uncertain, it would do little to reverse the 1m barrels of crude that are being pumped every day in excess of demand.

Opec leader Saudi Arabia has ruled out a production cut, due to its already diminishing market share.

Rival Iran has also vowed to up production to seize back market share it lost due to a trade embargo.

Related articles