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Another Big Reason to Think Oil Prices Aren't Going Up Soon [$ l2 X" x' [- y9 T+ `5 R! @8 B1 D/ ~
5 q- s4 j! L0 H' q& w7 Wby Tom Randall* K# V' f5 Q' G9 ]( m/ M: W# e$ z
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Oil 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. # Y9 d: ^/ Z8 G
Oil 'Rally'
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One 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.
( l- ~% ~* `& s7 f1 B- C4 Z1 @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. ( }8 ~1 B- m9 e. b$ |9 l) G
U.S. Oil Inventories Reach 80-Year High p: x. O, t( M2 W) }
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The 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. ( D2 b0 e. }$ i5 V% y* H
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.
4 W7 ?/ H* B" C% g; dMeanwhile, the U.S. is pumping oil at a faster pace than any time since 1972.
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. @8 M! J' R& v1 v5 A1 B% yU.S. oil production since 1983. Source: EIA
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