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Another Big Reason to Think Oil Prices Aren't Going Up Soon
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: X+ Y- z- ^6 K' W6 j9 Yby Tom Randall
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7 i( P: @* ?4 M6 d! o& l/ cOil just had its first weekly decline in a month, breaking a rally in crude prices. A bit of context: After what's happened over the last year, "rally" seems a bit of an overstatement. . x$ m6 D% q) s
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( Y0 s7 F; n8 `6 Z2 q2 c5 R$ EOne big factor that may be driving prices down this week: The U.S. is pumping so much oil it's running out of places to stash it. 0 P$ i3 [1 X0 v( }0 B& ~
Crude oil in storage in the U.S. has jumped to the highest levels in at least 80 years, according to a Bloomberg Industries analysis. The EIA this week reported that U.S. inventories rose 7.7 million barrels to 425.6 million. That's more than 20 percent higher than the five-year average.
1 L' b$ O V- s7 h# z G; R) MU.S. Oil Inventories Reach 80-Year High
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1 o* Q* M9 A# l3 _) rThe buildup of supply has been "colossal" and is responsible for oil prices falling this week, Thomas Finlon, director of Energy Analytics Group LLC, told Bloomberg News. 3 B; b7 O. Y6 ?6 N7 H, t" i
Winter weather and refinery outages have contributed to the supply glut. Even when those conditions subside, topped-out inventories and continued production growth may continue to suppress oil prices for the near- and medium-term, according to Bloomberg Industries.
; l) j9 I. ^; A' C7 ^5 s. kMeanwhile, the U.S. is pumping oil at a faster pace than any time since 1972.
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U.S. oil production since 1983. Source: EIA
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