During Thursday’s session on the New York Mercantile Exchange oil futures dropped below $27, as the market mostly ignored American drawdown in crude oil stockpiles amid oversupply.
On Wednesday, the US Energy Information Administration officially announced that for the week ended February 5 crude oil inventories lost up to 800,000 barrels. That should have supported crude prices. However, total stocks demonstrated weekly growth for the 11th out of 14 with surprisingly huge additions to product stockpiles.
To add to this, the vast majority of market participants think that current decline in American oil stockpiles would be quite temporary and exactly this sentiment applied downward pressure on crude prices overnight, according to an ANZ Bank report.
This week the International Energy Agency as well as the EIA reported they’re waiting for a steady oversupply, persisting for months just to keep crude prices low. Earlier on Wednesday the Organization of the Petroleum Exporting cut its previous forecasts regarding global oil-demanding growth, thus citing lower consumer appetite in such parts of the world as Brazil and Russia despite low prices.
The recent sag in crude prices has also challenged a historical correlation with one of the most valuded metals – gold. Indeed, spot gold prices surged to an eight-month high on Thursday due to the greenback’s weakness.