Downward Pressure on Oil Prices | Russell T. Rudy Energy LLC
Rising global production, record domestic inventories, and stagnant demand are proving a negative trifecta for crude oil prices. “World Oil” reports that we are nearing a 6 year low as a result.
The U.S. Energy Information Agency reports that domestic production has reached 9.37 million barrels of oil per day (bopd), the most since 1983. The agency also stated the inventories have climbed for 9 weeks to 448.9 million barrels, the highest level since 1982.
Production increases are not confined to the U. S. as Libya has doubled its production since February to 490,000 bopd. Further, Iran’s Oil Minister, Bijan Namdar Zanganeh, said that if sanctions on his country are lifted as a result of nuclear talks, it could increase production by 1 million bopd. Iran is already the fifth largest producer in the world with a current rate of 1.2 million bopd per the International Energy Agency.
While some analysts predict that U. S. shale producers will have to cut production at current prices, this does not seem imminent.
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/3/17/oil-trades-near-6-year-low-as-us-supplies-seen-worsening-glut .
