Crude oil prices are under pressure as rising U.S. oil output and fears that Libya and Nigeria are getting back into the game. At the same time, the slow dip on oil prices is putting prices into oversold territory.
The Energy Information Administration report failed to match the bullishness of the American Petroleum Institute report. The EIA reported that crude supply fell by 929,999 barrels. That number would have been larger if it were not for a 1.5-million-barrel release from the U.S. Strategic Petroleum Reserve. The EIA also reported a build of 191.000 barrels of gasoline as opposed to the draw reported by API. That is raising concern about demand. The EIA also reported a 562,000 barrel drop in distillate supply. Supply in Cushing, Okla, was down 728,000,
But the focus was on production. U.S. production increased around 450,000 barrels per day since the bottom in February. Last week production increased to 9,293 million barrels from 9,265 million barrels the week before. Add to that the poetical power-sharing deal in Libya, as well as talk of an increase in Nigeria, is adding to the bearish mood. Still, globally supply has been tightening. Yet the mood is negative and the market is fearful the economy is sputtering. With rising output and demand increasing fears, there are larger signs of global market tightening.