US crude oil inventories swelled by 7.6 million barrels to 469 million barrels last week, according to the US Energy Information Administration. The increase was well above forecasts of 2.4 million additional barrels, and came despite a decline in US oil production to 9.1 million barrels per day.
According to Vivek Dhar and Kofi Mensa, commodity researchers at CBA, the rise left US crude inventories — for this time of year — at the highest levels in at least 80 years.
The chart below reveals how crude oil inventories have ballooned this year compared to previous years. The scale is in day supply rather than actual inventory levels.
“The increase in stockpiles was well above consensus estimates and is consistent with the US EIA’s view that OECD commercial inventories will keep rising through 2015 and 2016,” the research pair wrote.
Given abundant US crude inventories, concerns about Chinese economic growth and increasing crude oil output from OPEC nations, Dhar and Mensa believe, in combination, this “will likely weigh on crude oil prices in the near term”.
Front-month WTI crude futures on NYMEX closed Thursday’s session down 0.56% at $46.38 a barrel.