U.S. Crude oil reserves unexpectedly jumped this week and major miners and trying to move older assets but can’t close deals because of cleanup costs.
Crude Oil Reserves Rise
U.S. crude oil stockpiles rose unexpectedly last week even as gasoline and distillate inventories fell more than expected, data from the Energy Information Administration showed on Wednesday.
Crude inventories rose 1.3 million barrels in the week to May 13, compared with analysts’ expectations for a decrease of 2.8 million barrels and a 1.1 million-barrel drawdown reported on Tuesday by the American Petroleum Institute.
Miners Can’t Afford to Older Pits
Major miners are trying to avoid hundreds of millions of dollars in closure costs by selling off pits, as cash is tight due to a prolonged commodities price slump, but the crippling cost of environmental rehabilitation is making it tough to seal deals.
Where mine sales have gone ahead, production is being prolonged, adding to oversupply in depressed markets, like coal.