Brent Crude Plunges

Brent crude oil fell from the highest finish this year due to apprehension that the global supply glut will remain. US oil futures reduced their discounts for Brent following results of an industry survey that showed slowdown in inventory gains. Brent diminished 4.9 percent. According to estimates of market analysts, prices have to fall go down further before production is adequately controlled to balance the market.

West Texas Intermediate trimmed down losses after reports of smaller inventory growth at Cushing in Oklahoma. Cushing supplies rose more than twice during the last three months.

Brent for delivery in April decreased $3.04 to $59.54 per barrel at the London ICE Futures European Exchange. Prices went up 18 percent in February which is the largest monthly increase since May of 2009. Euro region’s benchmark premium to WTI lessened ($9.95) after widening in January of 2014.

WTI crude (April delivery) slipped 17 cents (0.3 percent) to $49.59 per barrel at the New York Mercantile Exchange. Futures moved forward 3.2 percent also last month. Volume of futures traded was approximately 32 percent more than the 100-day daily average. Crude inventories in the United States increased by 8.43 million barrels to 434.1 million all the way to February 20. The EIA says US will produce 9.3 million barrels daily of crude for the rest of 2015.

Output is expected to reach 9.52 million next year.

Oil rigs in the US plummeted to 986 last week, based on statistics from Baker Hughes Incorporated last week. Current rig count denotes output growth of 385,000 barrels daily.

The Organization of Petroleum Exporting Countries brought up output to 30.6 million barrels last month which is above the cartel’s goal of 30 million, according to surveys.

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