Oil Inventories Out Today, Prices Continue to Fall

Crude oil inventories are scheduled to be announced this morning but oil prices slid again overnight, continuing their fall from the previous session after top exporter Saudi Arabia eliminated any hopes of cutting production.

At the same time, industry data showed a further increase in U.S. crude stockpiles and the message out of Iran was that it clearly had no interest in limiting production after sanctions against it were lifted. It referred to the joint Russian/Saudi proposal for major exporters to freeze output "laughable". One Iranian spokesman, Bijan Zanganeh, pointed to the increased production by other countries to 10 million barrels a day and “…we should freeze ours at 1 million barrels - this is a laughable proposal.”

Freeze Unlikely

Indeed, Saudi Arabia's oil minister Ali Al-Naimi said on Tuesday that a “…coordinated production cut by OPEC and non-OPEC exporters was not going to happen because not many countries are going to deliver.” In addition, Al-Naimi said that a proposed freeze in output at January levels, which were near record highs, would require "all the major producers to agree not to add additional barrels".

U.S. crude futures CLc1 were trading at $31.14 per barrel at 0526 GMT, 2.4 percent lower than their last settlement. International Brent futures LCOc1 were down 1.4 percent at $32.80 a barrel. Both dropped more than 5 percent the previous day.

The last inventory data showed that between 1 million and 2 million barrels of crude are produced every day in excess of demand, leaving over supplies in storage facilities around the world. The U.S. Energy Information Administration today will have more exact figures.

Cina Coren
Cina Coren is a former Wall Street broker and financial advisor. She holds a Master's degree in Communications and spent many years writing for international news outlets and journalistic publications. Today, Cina spends most of her time writing internet articles and blogs, and reading various newspapers to stay on top of the news.