Crude oil prices went down on Thursday after stocks of raw materials in the United States have risen despite OPEC’s efforts to cut yields and tighten the market. The futures on US WTI crude oil fell by 0.31 USD, or 0.60%, to 50.99 USD per barrel, while Brent oil depreciated by 0.35 USD, or 0.61%, to 56.59 USD per barrel.
This year, the Organization of Petroleum Exporting Countries (OPEC) and other producers, including Russia, have agreed to cut their yields by 1.8 million barrels per day to support prices. The deal helped raise oil from 30-40 USD per barrel by the end of 2016 and early 2017. But traders say supply remains strong despite quotas, largely due to rising US shale oil production. As a result, OPEC is generally expected to extend the deal after its end-date at the end of March 2018.
Increasing US yields, however, undermines OPEC’s efforts to tighten the market, and the country’s reserves remain high.
The crude oil reserves in the United States rose by 3.1 million barrels to 468.5 million barrels last week, according to the data of the American Petroleum Institute. Official Reserve Data will be published today by the Energy Information Administration.
American Bank Goldman Sachs said that due to the current foundations of supply and demand for oil, Brent expects an average price of 58 USD per barrel in 2018.