Oil slipped further below $56 a barrel on Wednesday as an industry report showing a large rise in US crude inventories signaled ample supply, even as OPEC achieves record compliance with its supply-cut accord.
US inventories rose by a larger-than-expected 9.9 million barrels last week, the American Petroleum Institute trade group said on Tuesday, ahead of the Energy Information Administration’s official supply report, Reuters reported.
“The inventory trend in the US raises doubts about whether the OPEC production cuts have actually resulted already in a tighter supply situation,” said Carsten Fritsch, analyst at Commerzbank.
Brent crude was down 13 cents at $55.84, half its level of mid-2014, when a global glut started a collapse in prices. US crude fell 23 cents to $52.97.
To support prices, the Organization of Petroleum Exporting Countries and other producers, including Russia, are cutting output by almost 1.8 million barrels per day in the first half of 2017.
Although OPEC has made a strong start in complying with the cuts, rising US stocks and a revival of US oil output have limited the price rise.
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