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Another Big Reason to Think Oil Prices Aren't Going Up Soon
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by Tom Randall W3 O5 }: k& p5 [; Q) y3 a" J3 d4 m
; p" v2 e1 M1 L0 ]1 W1 fOil 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.
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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.
+ X2 n, R4 _: o8 C: ?* Y! P% d1 UCrude 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.
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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.
" b) ~& P7 W# P6 R5 V6 w% aWinter 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. C9 ]; J. u1 W' j+ d
Meanwhile, 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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