Oil prices dripped for the third straight session, as slowing reductions to rig counts added to losses that have been mounting because of high US supplies.
The US Energy Information Administration reported that US crude investors had reached a record the past week, a sign that cheap prices have not begun to affect production. The rising supplies have led to the first weekly loss of the oil market in about a month.
The Wall Street Journal reported that light, sweet crude for March delivery, US benchmark, dropped 1.6% or 82 cents to $50.34 per barrel on the New York Mercantile Exchange. The March contract expired at the close of trade on Friday. The most actively traded April contract declined 2% or $1.02 cents at $50.81 per barrel.
Rig counts have been falling in new data that was released on Friday, but the 27-rig decline was less than half that registered about a week ago. This could be a bearish sign that the production will not fall to balance the market as quickly as some had anticipated.
The EIA reported that oil inventories increased by 7.7 million barrels last week to 426 million barrels, the highest level for this time of the year for around 80 years.
Dominick Chirichella, senior partner at the Energy Management Institute in New York was quoted by Reuters as having said, “It’s sell crude, buy products today. The issues with the East Coast refiners have certainly been weighing on the market.”
US heating oil rose more than 6% to $2.1368 per gallon on Friday, the highest since early December. Heating oil prices rose after news that Phillips 66 began experiencing extended delays in restarting a crude unit at its 238,000 barrel per day Bayway refinery in Linden, New Jersey, according to people familiar with the operations of the facility.
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