Crude oil prices have seen a sharp decline today as oil prices dropped during trading on Thursday of $ 50.94 after it opened trading at 50.92 & price fell to $ 47.84 to close above this point a little and at 48.94
Analysts have said the main reason was the abundance of global production and lack of demand from oil-consuming countries.
Also, Investing.com posted today that prices fell sharply on Thursday erasing all of February’s gains as the price approaches a 52-week low.
On the New York Mercantile Exchange, crude oil for April delivery fell 5.57% or 2.84 to $48.15 a barrel in afternoon trading. With one trading day left in the month of February, the price of WTI Crude nears a 52-week low of $44.37.
The precipitous drop in crude on Thursday came one day after the Energy Information Administration (EIA) said in its weekly report that U.S. crude oil inventories rose by 8.4 million barrels last week. The increase more than doubled its forecasts of a 4.0 million barrel weekly spike. In Cushing, Oklahoma, storage increased from 46.3 million barrels to 48.7 million — the highest level in over a year.
Oil prices often weaken when the U.S. dollar becomes stronger, as the dollar-denominated commodity becomes more costly for holders of other currencies.
The , which measures the greenback’s strength against a basket of six other major currencies, rose 1.12 points or 1.20% to reach a three-week high of 95.37 during midday trading.
The dollar strengthened amid the release of mixed U.S. data on Thursday. The Consumer Price Index (CPI) fell 0.7% in January, above estimates of a 0.6% decline. The drop in inflation was the largest decline since December, 2008. The CPI, which slipped 0.3 percent in December, experienced a decline for the third straight month.
On Wednesday, crude oil rose above $50 a barrel as Saudi Arabia oil minister Ali al-Naimi told reporters that oil markets had settled down after a prolonged period of volatility. Naimi’s reassuring comments on global oil demand outweighed the negative data.
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Record-high oil inventories in the United States the largest oil consumer in the world, Oil prices fell for a second day, but prices bounced sharply off session lows on relief the builds were less than an industry group had estimated.
Also, Investing.com posted today that the futures slipped lower on Friday, as concerns over a global glut in supplies persisted after data on Thursday showed that oil supplies in the U.S. rose to the highest level on record.
On the New York Mercantile Exchange, U.S. crude oil for delivery in April traded $0.13 or 0.25% higher to $51.70 a barrel during European early afternoon trade.
Prices tumbled $0.99 or 1.87% on Thursday to settle at $51.83.
Futures were likely to find support at $49.82, Thursday’s low and resistance at $54.22, the high from February 18.
Crude oil prices came under pressure after the U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 7.7 million barrels in the week ended February 13, compared to expectations for an increase of 3.3 million barrels.
Total U.S. crude oil inventories stood at 425.6 million barrels as of last week, the most on records dating back to August 1982.
Meanwhile, the crude benchmarks recovered some ground in recent trade. This was despite another generally negative Inventories Report from the DOE. Crude stockpiles declined less than anticipated, refinery utilization dropped and the rate of US production climbed to another fresh multi-decade high. This suggests crude’s rebound is more reflective of a corrective bounce / profit taking. Rather than a shift in the supply glut story, which may in turn limit the extent of a recovery.
Today, after U.S. supply data the oil prices slipped below $50 a barrel a round 16:00 GMT but after that the price recover to reach $ 52.70 near to the end of the day.
Also,The Reuters posted today that the Oil prices fell for a second day on Thursday, after the U.S. government reported another record high in crude inventories, but prices bounced sharply off session lows on relief the builds were less than an industry group had estimated.
Prices also retraced losses as investors covered more short positions in U.S. crude futures a day ahead of the expiry of the front-month contract.
U.S. commercial crude oil inventories rose 7.7 million barrels last week to a record 425.6 million barrels, , the U.S. Energy Information Administration (EIA) said. It was the sixth straight week levels were at a seasonal record peak.
The build was more than double the 3.2 million barrels expected by analysts in a Reuters poll, but far below the 14.3 million barrels estimated on Wednesday by industry group American Petroleum Institute (API).
Benchmark Brent and U.S. crude futures, which fell about 5 percent on Wednesday after the API report, came off session lows on the EIA data.
“It is still a bearish number though it provides a little bit of a relief rally if you’d been going with the API estimate,” Tariq Zahir, managing member at New York’s Tyche Capital Advisors said, explaining why the market pared losses.
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