Darrell Madding, Business Owner, Oil Industry

While some expected oil futures to change by the end of the quarter, there was little fluctuation observed in the prices at the end of business on Wednesday. This was welcome news, considering supply changes, overshadowing OPEC cuts, and increases to the production and inventory of crude oil here in the United States. These factors offset the fears that Venezuelan political strife would inhibit oil exports in the coming months. Meanwhile, U.S. sanctions on exports threaten to affect oil obtained by Iran.

The overall inventory of crude oil in the United States is at its highest since September 2017. In the past week, inventories jumped from 9.9 million barrels of crude oil up to 470.6 million barrels this week. These numbers reflect that imports are at their highest in the past five months, while refining is operating at 90% of total capacity.

Crude is the top producer of oil in the United States and they have reported a record high. The company reports that they have been producing an average of 12.3 million barrels of oil per day over the past week. Meanwhile, Brent, another U.S. oil producer, reports a 12% increase in per barrel sale prices with average costs reaching $72.18 a barrel. West Texas Intermediate saw a 0.5% drop in their per barrel price, coming down to $62.77.

The drop in refinery rates and the boom of oil imports helped the country stockpile the larger oil inventory in the recent week. Most of that inventory is stored along the gulf coast since waterborne imports are responsible for much of that inventory increase.

We have seen a 30% increase in overall crude oil prices throughout the year, largely as a result of supply cuts. The Organization of the Petroleum Exporting Countries (OPEC) announced that it would be extending those cuts over a six-month period. That’s equivalent to 1.2 million barrels of oil per day. This has opened the door for Brent to boost its oil production to 6.5% and WTI to raise its production by 6.3%, giving each corporation four months of consecutive gains.

In spite of pressure from the U.S. government, OPEC announced it has no plans to increase oil output. Meanwhile, sanctions on Iranian oil are still in effect, further complicating of crude oil to other countries. Chine is Iran’s largest country and it remains unclear as to whether they will comply with the sanctions.