Brent crude and West Texas Intermediate (WTI) oil prices fall on rising US stockpiles

Oil prices have fallen this morning as US production growth undermines the Organisation of Petroleum Exporting Countries’ (Opec) efforts to bring the market back into balance.

The American Petroleum Institute (API) yesterday said US crude inventories had swelled by 3.9m barrels in the week to 9 February to 422.4m. Official data from the Energy Information Administration (EIA) will be published later today.

Opec and non-Opec countries including Russia are cutting production by 1.8m barrels per day (bpd) through to the end of 2018 in an effort to slash the global supply glut.

Last month, Brent rose as high as $71 per barrel in intra-day trading for the first time since 2014, but prices have since slumped.

“The bearish factors working against oil are outweighing positivity which has been creeping back into the market over the past few months,” said ​Fiona Cincotta, market analyst at City Index.

“Whilst Opec appear to have down an excellent job removing the oil glut, the boom in US shale productions looks set to ruin Opec’s party. The US added 26 active rigs last week as per the Baker Hughes report, the highest number since 2015, in signs of extraordinary growth,” Cincotta said.

The International Energy Agency also yesterday predicted that rising supply from non-Opec countries could leave supply outstripping demand, Cincotta said.

“Whilst increased global demand could offer some support to the price, WTI is in a correction phase, after having dropped over 10 per cent from its recent peak.”

Brent crude oil, the global benchmark, dropped 0.67 per cent to $62.30 a barrel in morning trading.

West Texas Intermediate (WTI), the US benchmark, dropped 0.93 per cent to $58.64 a barrel.

Read more: Oil prices finally gain some ground after last week’s steep drop