Crude oil prices plummeted Wednesday, with futures falling to their lowest since January, after the Energy Information Administration reported an unexpected surge in the nation’s crude inventories, Kallanish Energy reports.
U.S. commercial crude stockpiles jumped 6.8 million barrels (Mmbbl) in the week ended May 31, EIA reported. (See story elsewhere in this issue.)
U.S. West Texas Intermediate fell to a session low of $50.66 per barrel after the EIA report, the lowest level since Jan. 15. WTI settled $1.80 lower, at $51.68/Bbl, falling 3.4%, to its weakest closing price in nearly five months.
Brent futures sank as low as $59.45/Bbl, also its lowest since mid-January. Brent was down $1.31, or 2.1%, at $60.66/Bbl at roughly 2:25 p.m. ET (1825 GMT).
U.S. gasoline inventories also rose, by 3.2 Mmbbl last week. Stockpiles of distillates, including diesel and home heating fuel, jumped 4.6 Mmbbl.
Meanwhile, weekly U.S. oil production ticked up to an all-time high of 12.4 million barrels per day, according to a preliminary report from EIA.
The stockpiles report compounded pressure on oil prices, which swiftly collapsed over the last week as the market braced for a prolonged trade battle between the U.S. and China.
President Trump’s threat last week to slap tariffs on Mexican goods, effective June 10, raised fears global economic growth will slow and cut demand for oil and gas.
The rise in U.S. stockpiles comes as members of Opec+ are preparing to meet to decide production policy post-June 30. Opec+, which includes most members of Opec, along with a number of non-Opec producers led by Russia, have since Jan. 1, been withholding 1.2 Mmbpd from the market, a pact which expires the end of this month.
This post appeared first on Kallanish Energy News.