Current Oil Prices Drop with High U.S. Inventories

The current oil price sharply dropped as U.S. inventories reached their highest quantity since July 1990.

U.S. benchmark oil for delivery in May was $1.77 or almost 2 percent lower to $95.42 per barrel during midday NYMEX trading.

According to the Energy Department, supplies of crude oil grew by 0.7 percent, or 2.7 million barrels, to 388.6 million barrels during the week that ended on the 29th of March. The oil supply of the country is currently 7.2 percent higher compared to last year and the highest since the 27th of July 1990 when it stood at 391.9 million barrels.

The daily oil output in the United States is around 7.1 million barrels, a rate that is higher by 22 percent compared to last year and the highest in twenty years. In the meantime, refineries are gradually increasing output after going through maintenance periods to get ready for the shift to summer grade gas. In the past week, their working capacity was around 86 percent.

Moreover, gasoline demand during the month that ended on the 29th of March was down 1.2 percent compared to last year at a daily average of around 8.5 million barrels. Cold weather in the past month may have stopped many from driving. Gasoline inventories shed 600,000 barrels in the past week, but analysts anticipated a decrease that of twice as much as that quantity. Gasoline futures prices fell 2.6 percent or 8 cents to $2.96 per gallon in the NYMEX.

According to AAA, the average gasoline price today is $3.64 per gallon. That rate is 11 cents lower compared to last month and 29 cents lower versus the same period in the past year.

Brent was $2.22 percent or $2.38 lower to a crude price per barrel of $108.31 on London’s ICE Futures Exchange.

In other NYMEX trading, heating oil fell 6 cents to its current price of $3.03 per gallon. The price of natural gas decreased 3 cents to $3.94 per thousand cubic feet.