Crude oil prices tumbled after an early surge on Wednesday, as data from the U.S. Energy Information Administration showed a seventh-straight weekly rise in U.S. crude inventories.
According to the data released by the EIA this morning, crude inventories in the U.S. increased by 5.8 million barrels in the week ended October 2, rising much more than forecasts. With last week's surge, crude inventories rose much above forecasts in as many as six weeks out seven.
On Tuesday, data from the American Petroleum Institute showed that U.S. crude stocks climbed by 7.8 million barrels in the week ending November 2 to 432 million.
Oil prices rose sharply in morning trades after reports suggested that Russia and Saudi Arabia have started bilateral discussions over possible 2019 oil production cuts. According to Russia's TASS news agency, which cited an unnamed source at OPEC, Saudi Arabia proposed the cuts.
However, prices fell after the release of U.S.inventory data.
Crude oil futures for December ended down $0.54, or 0.9%, at $61.67 a barrel, the lowest settlement price in nearly eight months.
On Tuesday, crude oil futures for December ended down $0.89, or 1.4%, at $62.21 a barrel.
The U.S. government's decision to grant sanctions to some top buyers of Iranian oil, including India, China and South Korea, and the very likely scenario of lower demand for crude due to the impact of the trade war have significantly eased worries about any short supply in the market.
Meanwhile, the OPEC has suggested that it would cut output next year, aiming to shore up the oil market that has lost significant value in the past few weeks.
With last week's increase, U.S. oil production has now risen to a record 11.6 million barrels a day, the EIA report shows. The OPEC members and allies are expected to discuss this rapid rise in U.S. oil output, during their meet coming weekend.
The material has been provided by InstaForex Company -
www.instaforex.com