Oil Prices Fall as Crude Stocks Hit New Record

At 0700 GMT, Global June Brent crude oil futures were trading at $51.19, up $0.32 or +0.63%. West Texas Intermediate, the USA benchmark for the price of oil, was lower by 1.37 percent, declining to $47.58 per barrel.

Oil prices dipped on Thursday, stuck near four-month lows because of investor concerns that OPEC-led supply cuts were not yet reducing record US crude inventories.

The American Petroleum Institute said late Tuesday that USA inventories climbed by 4.5 million barrels to 533.6 million last week, outpacing analyst forecasts of 2.8 million.

Oil rose as an increase in US crude inventories was countered by a drop in fuel stockpiles in the world's largest oil consumer.

USA crude oil exports averaged 520,000 b/d in 2016, a 12 percent from 2015 levels.

USA shale oil producers have been adding rigs, pushing up the country's oil production to about 9,1-million barrels per day, from about 8,5-million barrels per day in late 2016.

FXTM research analyst Lukman Otunuga said oil benchmarks will remain vulnerable to downside shocks as growing concerns over the excessive oversupply in the global markets weighed heavily on sentiment. This forced refiners to send huge volumes overseas. The price for oil came under pressure mid-March following steady reports of gains in oil storage and production in the United States, the world's leading economy.

United States commercial crude oil inventories fell ~0.2 MMbbls (million barrels) in the week ending March 10, 2017.

The report also showed China imported just 7,245 tonnes of gasoline in February, tumbling 94 percent from the same period a year ago.

In Russia, private oil producers are ditching their scepticism and lining up behind an extension of output cuts after previous oil price increases compensated for lost income. The contract dropped $0.20 to $48.04 on Wednesday. The bulls have stepped in again and have forced the price to increase significantly in the last few hours, is trading right above the 50.60 level and is very close to erase all today's losses.

The bullish news that investors are waiting for is the announcement that OPEC is strongly considering extending its program to cut production beyond the June deadline. However, unless there is unexpected bullish news, I don't think there is enough buying to drive prices into this area.

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