Brent crude dips below $59 as US government data shows record stocks
Brent crude oil prices fell below $59 a barrel yesterday after US government data showed crude stocks hit a record high last week.
US commercial crude oil inventories rose by 7.7 million to a record 425.64 million barrels in the week ended February 13, the US Energy Information Administration said.
The jump was the biggest weekly addition in barrels since records began in 1982, exceeding analysts' expectations of a 3.2 million barrel rise.
Petrol stocks rose by 485,000 barrels compared with analysts' expectations in a Reuters poll for a 167,000 barrels gain.
Crude stocks at the Cushing, Oklahoma, delivery hub rose 3.66 million to 46.26 million barrels, the EIA data showed.
"The report (is) basically bearish because you continue to add crude to storage, showing it will take some time for the drops in rig counts to have an impact on supply," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
The market has tended to retreat after swelling US crude inventories, but then rally after falling US rig-count numbers.
"Tomorrow we could see a recovery in expectation of another sharp drop in the rig count," said Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt.
"The focus is again back on the oversupply - the big question is for how long?"
At the same time, production from the world's biggest exporter Saudi Arabia may be increasing to near 10 million barrels per day, consultancy PIRA said yesterday.
The estimate suggests the country is adhering to the strategy of protecting market share rather than cutting production to boost prices.
Separately, BP's Azerbaijan arm said 2014 output from fields in that country was down slightly from a year earlier, driving a fall in the country's total oil production.
Falling oil production at the Azeri-Chirag-Guneshli oilfields, which account for most of Azerbaijan's output, has raised concern in the former Soviet republic.