Soaring crude output in the U.S. made oil futures settle lower

Oil futures struggled to end on a positive note on Wednesday’s session driven by the continuously rising supplies from OPEC producers, which also restored concerns of oversupply in an already bloated market. Soaring crude inventories in the U.S. also influenced prices.

According to the American Petroleum Institute (API) last Tuesday, crude stocks in the United States added as much as 1.6 million barrels in the week to 497.2 million barrels on July 14 on the previous week.

Supplies coming from the Organization of the Petroleum Exporting Countries (OPEC) are still high due to the soaring production from members Libya and Nigeria, regardless of the organizations pledge to reduce output to prevent supply glut. BNP Paribas said that that the two nations made significant improvement in terms of restoring their oil supply, adding that output in Libya is more than 1 million barrels per day (bpd) while Nigeria’s loading schedules for the month of August only rose by 2 million bpd.

BNP Paribas also said the reference production levels of October 2016 versus the increment of oil supply from Libya and Nigeria came in at 450,000 bpd on average, almost 40 percent to the 1.25 bpd reduction led by 10 OPEC producers that are part of the supply curb.

Looking on prices, U.S. West Texas Intermediate (WTI) crude futures fell by 0.3 percent or 12 cents to trade at $46.28 a barrel and global benchmark Brent crude futures slipped by 0.2 percent or 11 cents to settle at $48.73 a barrel on the day.


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