Worldwide surplus pushing down oil prices
Oil notched its longest losing streak in four years as expanding U.S. stockpiles overshadowed supply concerns from the Persian Gulf to Latin America.
Futures fell as much as 1.4 percent in New York late last week, extending the decline to a ninth day. The last time crude registered such a downtrend was mid 2014. American oil inventories grew at more than twice the anticipated pace last week, a government report showed on Wednesday. That supply overhang trumped indications OPEC may discuss production cuts as soon as this weekend.
Crude has tumbled 20 percent since touching a four-year high last month as apprehension over sanctions targeting Iranian oil exports evaporated, in part because of exemptions handed to some of the Islamic Republic's biggest customers. President Donald Trump said the waivers were intended to soften the blow to global crude markets.
“Most of this selling pressure is related to the removal of fears concerning tight supplies from the drop in Iranian exports and the granting of those temporary waivers,” said Gene McGillian, a senior analyst and broker at Tradition Energy.
Consultant FGE estimated the waivers granted to China, India and six other nations will allow Iran to continue shipping 1.2 million to 1.7 million barrels a day, more than previously expected.
“OPEC and Russia may use cuts to support prices at $70 a barrel,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank in Copenhagen. “But the U.S. sanctions waivers could prevent prices from breaking above $80.”
Last week's increase in U.S. crude inventories was the seventh week of gains, the longest stretch since early March, according to Energy Information Administration data.
An oil drilling well inside the Saudi Aramco oil company’s compound in Dhahran, Saudi Arabia, last month.