Crude oil price, news and analysis:
- The price of US crude oil is dropping still further as oversupply in the market continues to dominate trading.
- News Wednesday of strong US demand for gasoline and distillates gave the price only a brief boost.
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Crude oil price gives up gains
The price of US crude oil is continuing on its downward path Thursday after a modest rally Wednesday on news that US demand for gasoline and distillates remains buoyant. Data from the Energy Information Administration showed that gasoline inventories fell by 3.2 million barrels last week while stockpiles of distillates, such as diesel and heating oil, dropped by 371,000 barrels.
However, attention turned Thursday from demand to supply, with the EIA figures also showing that inventories of crude rose by 5.8 million barrels and output hit a record 11 million barrels per day. That reversed the earlier gains and extended the downward trend in place for most of this month so far.
US crude oil Price Chart, Hourly Timeframe (July 2018)
The problem for oil bulls is that the market remains oversupplied. Not only is US output at a record level but other major oil producing nations such as Russia and the members of the Organization of the Petroleum Exporting Countries are having trouble reducing their production.
OPEC and non-OPEC producers cut oil output in June by 20% more than agreed levels, compared with 47% in May, the Reuters newsagency reported Wednesday. If these trends continue, the price of US crude could yet fall further.
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--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex
