Oil Price Drops in the US with Data Showing Low Crude Usage

Oil prices declined in New York in the past days with new information showing a slower level of petroleum usage.

March delivery for the benchmark WTI crude price per barrel declined by 87 cents to end at $97.61.

In London, March delivery for Brent North Sea crude price grew by 58 cents to finish at $111.56.

Positive economic data, particularly from China, which is experience an expansion in manufacturing activity, aided oil prices earlier.

However, the United States’ national data of oil being released weekly reflected sluggish outputs from refineries and increasing stocks of crude. Both of these raised concerns regarding the demand for oil.

With majority of the country facing an unusually favorable winter, the Department of Energy expressed that the overall amount of supply in the past month declined by 4.3% compared to the previous year and inventories of crude increased during that time of the year.

Tom Pering of Inenco, a British energy consultancy, said earlier that concerns regarding Iran and tensions between South Sudan and Sudan over transport fees of oil have been keeping crude oil prices stable. He said that the situation in Iran specifically the threat of more sanctions from the United States and lower output is still a concern.

In the meantime, a union of Nigerian oil workers postponed a two-day strike on a conflict with Shell that had ignited worries on oil shortages and led to long lines in the stations of the largest crude producer in Africa.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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