Oil Prices Steady As U.S. Crude Inventories Jump

Investing.com – Oil prices steadied on Thursday morning in Asia as U.S. crude stock rose to its highest level in 11 months, putting pressure on oil prices. The market expects OPEC to cut output, easing market fears of an oversupply.

for January delivery remained at $54.34 a barrel at 11:36PM ET (03:36 GMT) on the New York Mercantile Exchange, while for January delivery stood at $63.15 on London’s Intercontinental Exchange.

According to U.S.’ Energy Information Administration, U.S. commercial crude oil stocks surged by 4.9 million barrels as of Nov. 16 to 446.9 million barrels from the previous week, marking the highest level since December 2017.

“U.S. inventory data…continued to show significant supply builds, which comes on the back of sustained record U.S. crude oil production,” Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda, told Reuters.

The country cut three oil rigs to a total of 885 as of Nov. 21, while neighboring Canada added six oil rigs, reaching 124 in total, data released Wednesday by energy services firm Baker Hughes showed.

Meanwhile, U.S. President Donald Trump thanked OPEC de-facto leader Saudi Arabia for helping to lower oil prices, after releasing a statement earlier in the week declaring its friendly stance towards the kingdom. Saudi Arabia has been encountering international pressure over its role in the death of journalist Jamal Khashoggi.

“Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let’s go lower!” Trump tweeted on Wednesday.

Tom Kloza, co-founder of the Oil Price Information Service, told CNBC that the low oil prices won’t last for too long.

“I believe that we are seeing an ‘oversold’ chapter for oil. Oil can be stabilized in December and will be helped by the higher demand as U.S. refiners ramp up to over 18-million barrels a day of crude use. A cold northern hemisphere winter juices up demand as well,” said Kloze.

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