Rising US supplies send prices back down

Oil prices fell again on Wednesday following an American Petroleum Institute report about an unexpected rise in US inventories.

Oil prices fell back around the USD 30 a barrel mark after the American Petroleum Institute report revealed that US crude supplies climbed by 11.4 million barrels in the past week, far exceeding the predicted 3.3 million barrels.

Brent and US crude had risen more than 6% to USD 32 per barrel on Tuesday after the Iraqi minister of oil said Saudi Arabia, OPEC’s top producer, and Russia, which has the world’s third-highest output, were displaying signs of flexibility over possible joint action to eliminate the large surplus.

“The need for a reduction in output is clear, as it has been to us for the past 18 months, but it remains uncertain whether Saudi Arabia and its allies within OPEC are ready to return to the bargaining table,” Tim Evans, energy futures specialist at Citi Futures, wrote in a note to US cable news channel, CNBC.

The oil glut has been keeping prices at a 12-year low over the past 16 months. Since the beginning of January, prices have fallen about 16%.

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