Oil prices had begun to stabilize recently and soared near 3-year-highs at the beginning of the year. Nevertheless, despite the best efforts of OPEC and Russia to cut back on production, there was always a threat from the United States to offset prices. The US has cheaper methods for producing oil compared to the rest of the world and is thus not afraid to drive prices lower. Contrary to what most other major oil exporters had been doing over the past year, the United States have continued to increase their oil production activities.
Yesterday a new report on oil reserves in the US indicated a much larger stock than expected, with production rates higher than 10 million barrels per day, which is 3.3% growth. Inventories of crude oil in the States also increased, and so did gas and diesel reserves.
Because of the greater availability of oil on the market, the price for the black gold began to decline again. The Brent crude was at $66.60, while the WTI retreated to $62.77.
