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Another Big Reason to Think Oil Prices Aren't Going Up Soon
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by Tom Randall
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Oil just had its first weekly decline in a month, breaking a rally in crude prices. A bit of context: After what's happened over the last year, "rally" seems a bit of an overstatement. * {9 k! O% n ?1 `- G
Oil 'Rally'
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& b3 t+ k/ E" N6 r! k' Z1 sOne big factor that may be driving prices down this week: The U.S. is pumping so much oil it's running out of places to stash it. . X9 f: ^0 P3 F7 j
Crude oil in storage in the U.S. has jumped to the highest levels in at least 80 years, according to a Bloomberg Industries analysis. The EIA this week reported that U.S. inventories rose 7.7 million barrels to 425.6 million. That's more than 20 percent higher than the five-year average. " M- n7 L$ b3 z# @8 Q" |
U.S. Oil Inventories Reach 80-Year High0 Q2 O& t( D9 \/ Y- l6 y
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The buildup of supply has been "colossal" and is responsible for oil prices falling this week, Thomas Finlon, director of Energy Analytics Group LLC, told Bloomberg News. 8 \; G2 a1 E% }! D+ l
Winter weather and refinery outages have contributed to the supply glut. Even when those conditions subside, topped-out inventories and continued production growth may continue to suppress oil prices for the near- and medium-term, according to Bloomberg Industries. $ P) u" C3 m" y& J- Q7 q3 F) Z
Meanwhile, the U.S. is pumping oil at a faster pace than any time since 1972.
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U.S. oil production since 1983. Source: EIA
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