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Oil drifts lower on inventory build

Economies still struggling to soak up excess crude oil on the market.

By Daniel J. Graeber
Oil drifts lower on inventory build
Crude oil prices drift lower in Wednesday trading, quieted by federal holiday honoring military veterans. (UPI Photo/Monika Graff) | License Photo

NEW YORK, Nov. 11 (UPI) -- Supply-side market strains pulled on crude oil prices in early Wednesday trading, with major indices erasing much of the mid-session gains in earlier trading.

Brent crude oil was relatively flat in early Wednesday trading, down only a fraction of a percent from the previous close to $47.37 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, was down almost 1 percent to $43.78 per barrel.

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The American Petroleum Institute reported crude oil stockpiles increased by 6.3 million barrels for the week ending Nov. 6 in a sign the economy has yet to soak up the excess in oil production. A report from the U.S. Energy Information Administration this week said almost all of the domestic shale basins responsible for U.S. production gains are in decline. The Organization of Petroleum Exporting Countries, however, said it was keeping its output steady on expectations of growing demand from Asia.

China's National Energy Administration said Wednesday it aims to advance efforts to push carbon out of the Chinese economy under the terms of a five-year plan ending in 2020. By the end of the period, China could increase its renewable energy production capacity by 15 percent of total consumption.

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The International Energy Agency reported this week that, by 2040, net energy imports from China will be nearly five times that of the United States, which is still a net oil importer despite the shale boom.

Markets may be relatively stable Wednesday because of federal holidays honoring military veterans. EIA releases its data on crude oil storage and OPEC releases its monthly market report on Thursday.

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