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Another Big Reason to Think Oil Prices Aren't Going Up Soon+ k8 q: p) b, a: ?) @" Y) f
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by Tom Randall# H% a- _4 a( Y7 q2 K+ r2 W" z
# y" S! {" H0 ~: K( [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. 3 ]+ P* }: f$ M* O8 {
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. $ s9 ?% s+ n2 E3 _2 R- r
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. + c* @! Q! g' {! s, @
U.S. Oil Inventories Reach 80-Year High( \& p6 N; c. @3 l! f6 I
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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. * V3 J1 Q$ l3 d, K1 ^" Q% B 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.
6 `* K; d# K& k7 A1 F8 B% NMeanwhile, the U.S. is pumping oil at a faster pace than any time since 1972.) u( w! @3 ^$ y( [
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U.S. oil production since 1983. Source: EIA
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