Oil Futures Tumble on Record Inventories
Oil futures fell as domestic inventories hit record peaks, while fears over supply disruptions kept world prices unchanged for the most part.
June delivery light sweet crude slid $1.34 or 1.3% on Friday to settle at $100.60 per barrel on the New York Mercantile Exchange, the lowest trading price since April 7. Prices plummeted 2.7% for the week.
Supplies of crude oil stand at 397.7 million barrels, the highest inventories since 1982 when the US Energy Information Administration started to monitor weekly data. The stockpiles have soared in 13 of the past 14 weeks, according to Wall Street Journal.
As per data that’s posted monthly since 1920, the supplies are at a peak last witnessed in 1932.
“The inventories have really been key this week. Right now, it almost seems like the U.S. is choking on crude oil,” said Oliver Sloup of Chicago-based iiTrader.
US oil production has surged in recent times as advanced technology has made it possible for producers to reach trapped supplies.
However, demand for crude oil drops in spring as refiners halt processing to carry out seasonal maintenance. Analysts anticipate that inventories will drop later in the spring after refineries resume increased production before the summer, which witnesses heightened driving.
Gasoline prices shed as much as 0.9%, losing for the third consecutive day.
Gasoline for May delivery plunged 0.67 cent to $3.0828 per gallon as of 10:12 am on the New York Mercantile Exchange. The amount traded was 54% above the 100-day average. Stockpiles for the commodity hit 210 million barrels last week after losing 274,000, less than the 1.65 million drop a Bloomberg survey had estimated.
On average, the US pump price slid 0.8 cent to sell at $3.693 per gallon, a high last seen 13 months ago, as shown in data from AAA in Florida. Prices have added 18.1 cents since a year ago.
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