The price of US crude oil has declined a day ahead of the US Energy Department’s weekly inventories update. Despite the Keystone XL pipeline helping to reduce the glut at price-important Cushing, Oklahoma, the overall fundamentals for US crude have had a bearish cast for some time, with production at historically high levels and nationwide supplies showing an uptrend in recent weeks.
According to a Reuters survey of analysts, the government report is expected to show a rise in crude oil inventories of 2.23 million barrels for last week, following on from the 1.43 million rise reported last week. Crude inventories have increased 3.9% over the course of the last seven weekly reports, and with refineries experiencing downtime as we enter the maintenance phase between the winter heating season and summer it is difficult to see utilisation rates picking up in the near future to help draw down the stockpile.
By mid-afternoon in New York, crude oil futures for April were down 0.81% at $100.24 after touching a low of $99.95 a barrel earlier in the day, the first time the price of the most liquid contract has dropped below $100 a barrel in close to a month.
Brent crude, meanwhile, has risen on a resurgence of fears that any escalation in the strife between Russia and Ukraine could disrupt the supply of oil out of Russia.