Published: Thu, March 30, 2017
Markets | By Terence Owen

United States crude stockpiles at record high as imports surge

"US data suggests that oil prices around $US50 per barrel are encouraging the restart of idled USA shale oil output, says Dhar, noting that "supply has proven more resilient, lower-cost and quicker to respond than predicted". At 631 rigs, this is the biggest count since September 2015.

The market didn't see any relief from the inventories at the Cushing, Oklahoma, facility this week either, which also increased-to the tune of nearly 2 million barrels (+1.968MM)-on top of last week's 2.06-million-barrel build.

The bloated storage comes as US oil production has risen over 8 percent since mid-2016 to more than 9.1 million barrels per day (bpd), levels comparable to late 2014, when the oil market slump started.

Saudi Arabia said its crude exports to the United States would fall by around 300,000 barrels per day (bpd) between February and March, boosting price sentiment.

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 futures were active in the Asian trades early Tuesday, but still roam around its lower levels in 4 months, with the oversupply and high U.S. inventories continuing to be an issue.

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Investors now want to see whether yesterday's figures from the Energy Information Administration, a unit of the Department of Energy, confirm the rise.

China's crude output, Asia's largest crude producer accounting for 47% of region's total production, fell 8% on-year in the first two months to 3.9 million barrels.

But the accelerating crude output by upstream players means the well positioned to crimp the Organization of the Petroleum Exporting Countries' effort to pare down the still-bloated global crude inventories.

Crude supplies climbed by 4.95 million to 533.1 million barrels.

Oil prices rose on Tuesday, helped by expectations that an OPEC-led output cut would be extended beyond June but gains were pegged back by concerns about persistently high crude inventories. Saudi Energy Minister Khalid Al-Falih has said the group would extend the deal if oil stockpiles remain high. "Over the coming weeks we expect a sharp reduction in imports and increase in refining runs which should lead to impressive crude inventory draws", analysts at AB Bernstein said on Monday in a note to clients. Overall gasoline demand also fell 2.9% from year-ago levels. However, with recent declines in US crude oil production, the rate of USA crude oil export growth has slowed significantly from its 2013-2015 pace.

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