WASHINGTON, July 28 (UPI) -- Crude oil prices are set for a dramatic downturn as huge stockpiles of fuels and heating oil accumulate in U.S. storage facilities, analysts say.
The Organization of Petroleum Exporting Countries is prepared for drastic declines in crude prices as suppressed demand translates to a buildup of oil-based fuel reserves.
"Inventories are at just ridiculously high levels," says Kevin Rooney, chief executive at the Oil Heat Institute of Long Island trade group. "I would imagine that just about every available barrel of storage is full."
OPEC unveiled a series of cuts in its production quota beginning in 2008 as the global economic recession gained momentum. But if an economic recovery doesn't translate to a boost in demand, a tepid pricing trend may continue, The Wall Street Journal reports.
As a result, OPEC officials may consider another round of production cuts at the next regular meeting of the oil cartel set for Sept. 9. OPEC members, however, may not follow suit as some continue to produce more than OPEC agreed to in an effort to generate more revenue, the Journal notes.
Meanwhile, national refiners have cut back on their production in an effort to protect energy prices, but that may not be enough as the global energy market plateaus.