Crude oil supply in the US rose to a new record, exceeding 4 times analysts' forecasts. It is also expected to rise further in the coming days. These figures confound efforts by OPEC, Russia and another 10 exporter to reduce global oil reserves by limiting their own production.
Over the past three months, oil has traded in a range between $49.61 and $55.24. Technically breakthrough under the price of $50 could lead to a new decline, as the next target is $42.
Saudi Arabia's minister of energy Khalid Al-Falih said that manufacturers have welcomed the return of shale and said it would help to fill some of the demand to offset the decline elsewhere.
The current supply increase comes at the worst time when refineries used less crude over that season. Analysts expect prolonged decline in the price, especially with the big gasoline stocks in the United States. Sentiment will not be favorable to support prices.
Source: CNBC
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