United States crude prices plummet to 13 year low

If this key hub ran out of room to stockpile oil, that crude would have to be diverted elsewhere, and that would hurt oil prices.

Crude inventories remain high in the USA with more than 7 million barrels being added last week. It surged to $335 on Tuesday before dropping 25 percent on Wednesday.

Futures fluctuated today in NY, swinging between a drop of as much as 1.1 percent and a gain of 2 percent. “The volatility in the dollar and the volatility in crude have been like a constant for the past two to three weeks now”, Nair said. Thus, the storage cost of crude oil for 12 months could be $4.20 per barrel at most, keeping administrative fees and other pumping costs at $1 per barrel for 12 months. Royal Dutch Shell Plc said fourth-quarter profit fell 44 percent.

Crude oil inventories at Cushing, Oklahoma, the delivery point for the West Texas Intermediate (WTI) futures contract traded on the New York Mercantile Exchange (Nymex), are 23 million barrels above the five-year average as of January 29. It is still up 24.5 percent for the year.

Global benchmark Brent crude futures LCOc1 were 53 cents lower at $33.93 per barrel at 1454 GMT, and down from an intraday high of $35.14. Commerzbank AG said it’s skeptical that any output cuts will result from the effort. As a result, the Brent premiumJ to WTI rose yesterday from $1.84 to $2.76 for every barrel, covering United States demand in compensation for the strengthening of the dollar and inefficient private manufacturing sector, not just supporting the competitiveness of the American economy but providing it with overprofit.

Crude inventories rose by 7.8 million barrels in the last week, compared with analysts’ expectations for an increase of 4.8 million barrels, as imports jumped and refiners trimmed throughput.

But despite the rise, analysts said prices would remain low in 2016 and 2017 as global demand slows and inventories swell.

It says, according to the Goldman Sachs Group, the global surplus which fueled the more than 70 per cent price drop in the last 18 months, is expected to shift to deficit as US shale output falls.

When OPEC member nations on Thanksgiving 2014 decided that they were not going to cut production and that they wanted to use the existing production level to retain market share and destroyed American oil interests, I do not believe that they anticipated that they were risking their nations.