Oil markets fall on growing US inventories
Increasing US inventories have continued to dampen oil sector trading.
Oil markets have continued to tumble in trading this morning (15 October 2015) following the release of new data from the American Petroleum Institute (API).
According to API’s latest weekly update, the seven days ending 9 October 2015 witnessed an increase in US oil stockpiles of 9.4 million barrels to 465.96 million. This was despite predictions that inventories would increase by a more modest 2.4 million barrels.
This latest increase comes at a time of considerable uncertainty for the sector in general, with growing concerns that oil prices may see further losses in the coming months and this, in turn, could have a major impact on share prices and the global recovery in general.
Banking group ANZ stated in a note today: “[US oil] remained under pressure as the focus turns to US crude inventories. The sustained period of lower crude oil prices has started to impact the credit profile of companies.”
As of 10.02 am BST, US light crude values had fallen by $0.55 from the opening of markets today to stand at $46.09 per barrel. Meanwhile, Brent crude prices were down by $0.12 per barrel to $49.03.
Responding to this latest downturn, Barclays released the following forward-looking statement regarding oil sector activity this morning. It focuses on the coming market pressures that will impact trading values over the medium-term.
“What happens to oil market balances after 2016 depends critically on three main wildcards: a slowing China’s impact on oil demand, the return of Iranian oil and the rate of mature field decline,” it stated.