Crude oil prices keep falling. Prices slid to a fresh 6-year low this week, the lowest price since March 2009, despite the minor comeback they had recorded in the previous weeks.
We commented last month that nothing guaranteed that oil had found a bottom and this week things are starting to look bad again. While that losing skid was snapped Wednesday afternoon after the Federal Reserve downgraded its growth outlook, weakening the dollar, there is still no guarantee prices will not start falling again.
Stored supplies of crude oil in the US are at their highest level in about 80 years, according to the Energy Information Administration, and supply just keeps growing. Domestic crude production rose to a new weekly record of 9.4 million barrels this week. In monthly data, production last exceeded that level in November 1972.
Concerns are mounting that the nation’s crude-oil storage facilities will hit full capacity in some locations, according to government figures. That has the potential to push prices even lower. For nine straight weeks, US crude stocks have been rising as traders put more and more oil in storage tanks waiting for prices to rebound.
Stockpiles in Cushing, Okla., a key hub and the delivery point for a major Nymex contract, rose by 2.9 million barrels to 54.4 million barrels, the highest level on record in data going back to April 2004.