U.S. oil production continues to
defy forecasts that it is on the decline, and with refiners processing
as much of the stuff as they can, the glut of oil, gasoline and diesel
fuel keeps growing.
That should
continue to pressure oil prices, which rallied Wednesday because the
large weekly build in supply was not quite as gigantic as feared. The
U.S. Energy Information Administration reported that crude oil supplies
grew by 8.4 million barrels last week, well below the 11.4 million
reported Tuesday by the American Petroleum Institute.
The government's lower figure helped
trigger a relief rally in crude futures that erased steep losses and
were trading more than 2 percent higher for the front month futures
contract for West Texas Intermediate
crude. Another factor was comments from Russia's energy ministry
suggesting that possible coordination between Russia and OPEC was
discussed Wednesday.
"It's a record amount of crude oil in storage. It's a huge build in
gasoline, but there was a little strength in distillate demand, thanks
to the weather. It's squarely bearish again," said John Kilduff, partner
with Again Capital.
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