Oil futures fell slightly mid-week as prices of US oil slid to their lowest in nearly eight months. This came after a government report that revealed supply for domestic crude increased for the seventh week in a row, helping gasoline stockpiles to climb unexpectedly.
This move comes after big losses in recent times but also comes ahead of a meeting this weekend with Organization of the Petroleum Exporting Countries (OPEC) members and their allies, a meeting which could end in cuts to the global supply.
Early in the trading day, on Wednesday, a report that Russia and Saudi Arabia are in discussions for cutting crude output next year helped to boost prices. After this report, the United States Energy Information Administration reported domestic crude inventories are up nearly 6 million barrels. This is more than twice what analysts had expected.
As such, crude output reached 11.6 million bdp, which is a weekly record, even though analysts will continue to look for any monthly data that could confirm it.
Overall, US West Texas Intermediate crude (WTI) closed, on Wednesday, down 54 cents, which is only about one percent, at $61.67, the lowest closing for the stock since the middle of March. At one point in the day, however, WTI had fallen to its eight-month low of $61.20, on Wednesday, which is a drop of more than 20 percent from its most recent high, popping briefly into a bear market territory.
In addition, Brent crude, which is a global oil benchmark, was down 13 cents—to $72 a barrel—by the afternoon. Fortunately, this is slightly higher than a day before when it reached $71.36: its lowest value since the middle of August. By the end of the day, Brent was down 49 cents to $71.64.
On the other hand, rising production in shale has been helping to put the United States on course to reach the coveted 12 million bpd oil production mark sooner than they had originally forecast. Authorities report overall gasoline inventories are up 1.9 million barrels, which is far better than the 3.2 million barrel decline from the week before. Also, distillate fuel inventories lost 3.5 million barrels last week, which is also better than the week before, when the shift was down 4.1 million barrels.