According to data from Reuters, that's almost eight per cent below its open on 25 May, the day the Organisation of the Petroleum Exporting Countries (Opec) and other producing nations agreed to extend oil output cuts through the first quarter of 2018.
Commodities brokerage Marex Spectron said it expects a "lower supply of crude oil on the physical market" in the coming weeks, lending oil prices some support. "While we've seen USA oil inventories decline, the market is still not convinced we're seeing that trend worldwide".
Global petroleum and other liquids supplies stood at 97.17 million barrels per day in 2016, according to the EIA.
Moreover, oil is in abundant supply now.
Since OPEC announced the extension of production cuts, the market has continued to react bearishly with respect to the oil price. West Texas Intermediate light sweet crude futures were trading at just above $46 a barrel.
"Increased drilling activity in US tight oil basins, especially those located in Texas, is the main contributor to oil-production growth", acting EIA Administrator Howard Gruenspecht said in an emailed statement.
The main reason for the decline in the market is that investors were disappointed in OPEC and its lack of a coherent plan to salvage the crude oil market.
Scottish advisers welcome move away from independence
Sturgeon said she was appealing for MPs from all parties to work together to keep Britain in the European single market. The phrase "now is not the time " seems to have more weight after the election, with or without Theresa May behind it.
The lower forecast takes into account OPEC's May 25 announcement regarding the extension of its production cuts. The 1.8 million barrel a day reduction was enacted to drive the price of oil up and make the industry more profitable to OPEC producers.
The spat adds to other doubts about whether the agreement can support prices, including rising production from countries exempt from the agreement - Libya and Nigeria.
Distillate inventories also rose this week by 1.75 million barrels, while inventories at the Cushing, Oklahoma, site fell by 1.56 million barrels.
OPEC's actions to extend the production cut is a mockery of the whole exercise - an exercise in futility at that.
Yesterday's EIA report somewhat shocked analysts and traders because they were slowing accepting the possibility that inventories were finally showing steady progress toward drawing down to seasonal averages, which is one of the key goals of the OPEC-led plan to cut inventory, trim the global supply glut and stabilize prices.
OPEC also inadvertently contributed to the deluge of oil in storage.
Moreover, nothing suggests Qatar will leave OPEC, and Qatar isn't a core oil producer, meaning their participation in the OPEC cut agreement isn't crucial, Stifel wrote in a Wednesday research note.
Comments