Crude oil futures were little changed in the middle of the trading week, with prices struggling for direction amid record production and a larger-than-expected storage build. US oil prices will now try to find the next catalyst to reclaim $60.
January West Texas Intermediate (WTI) crude oil futures ticked up $0.08, or 0.14%, to $58.57 per barrel at 13:50 GMT on Wednesday on the New York Mercantile Exchange. US crude prices have slumped 18% this year and are on track for a weekly loss.
Brent, the global benchmark for oil prices, remained below $63 a barrel. January Brent crude futures rose $0.16, or 0.26%, to $62.87 a barrel. Brent is also on track for a weekly drop, adding to its year-to-date decline of 16%.
The two main developments on Wednesday are production volumes and storage numbers.
First, domestic oil output rose by 211,000 barrels per day to 13.9 million barrels per day, according to the US Energy Information Administration. This is the highest on record.
Second, US inventories of crude oil climbed by 6.413 million barrels for the week ending November 7, up from the previous week’s build of 5.202 million barrels. This came in higher than the market consensus of two million barrels.
Gasoline supplies fell by 945,000 barrels, distillate stockpiles declined by 637,000 barrels, and heating oil inventories rose by 55,000 barrels.
For now, it appears that investors are more worried about a global supply glut than looming sanctions on Russia’s Lukoil. But this could reverse, says Suvro Sarkar, DBS Bank’s energy sector team lead.
“There should be considerable support to oil prices around $60/bbl, especially given there could be short-term disruption to Russian export flows once stricter sanctions kick in,” Sarkar said, according to CNBC.
Looking ahead, meanwhile, the EIA anticipates domestic output to reach a fresh record level, while production will increase faster than demand.
In other energy markets, January natural gas futures surged $0.151, or 3.33%, to $4.684 per million British thermal units (Btu). January gasoline futures were flat at $1.9617 a gallon. January heating oil futures fell $0.0285, or 1.15%, to $2.4531 per gallon.