US crude inventories break decades-old record after huge build

Oil prices rose Wednesday as US dollar depreciated against other currencies.

The latest OPEC monthly report, released January 18, indicates that the cartel has decreased oil production by 210,000 barrels per day in December, month-to-month to 32.182 mbpd.

In its monthly oil market report for January, the Organisation for Petroleum Exporting Countries said the world’s non-OPEC oil supply this year is projected to decline by 660,000 barrels per day (bpd) to average 56.21mn bpd, following a downward adjustment of 270,000 bpd.

“If at any moment consensus is achieved among all oil producing countries on the necessity of the meeting, we will, of course, be prepared to take part”, Lavrov told reporters during a visit to Oman.

“Oil markets were volatile on Thursday as traders pushed the price wildly between gains and losses”, said analyst Jasper Lawler at trading firm CMC Markets.

The price of a barrel of Brent crude saw an immediate spike to near $36-levels, and it was trading at $35.27 at 9am UAE time on Thursday.

Falling crude prices and the rising dollar have been poison to the stock market with both sapping corporate profits.

Oil prices have extended gains due to the market being lifted by a slide in dollar value and a potential meeting of oil producers to discuss production cuts. But so far, none of OPEC’s Gulf members, including top exporter Saudi Arabia, has publicly backed calls for an emergency meeting.

Brent crude, the global oil benchmark, was up 0.7 per cent to $US34.68 a barrel on London’s ICE Futures exchange shortly after the jobs data. Crude futures stateside were up $1.77, or 5.9%, to $31.65 U.S.

The price of Venezuela’s crude basket, which had fallen for more than a month, rose $2.53 last week to $24.16, while the OPEC Basket climbed $2.66 to $26.17.

United States shale producers had been partly protected from the price collapse having pre-sold oil when values were much higher, but with many of these so-called “hedges” ending or close to ending they will be fully exposed to new lower prices. “With demand slowing, rebalancing may not occur until mid-2017 or later”, it said, adding that “global supply should grow in 2016 despite low prices”.