Oil price takes aim at $48 US a barrel
EIA data shows crude inventories increased by 2.5 million barrels last week
The price of a barrel of North America's benchmark crude oil lost almost $1 on Thursday to trade at $48.55 US.
That's the lowest price for a barrel of West Texas Intermediate since April. Prior to that, the oil price went as low as $43 a barrel in March.
The catalyst for the sell-off was data out of the U.S. Energy Information Administration showing that inventories keep rising as producers pump oil but keep it in storage to wait out low prices.
The EIA said U.S. crude inventories increased by 2.5 million barrels to 439 million barrels last week. Analysts polled by Reuters had been expecting the inventory figure to come down by about the same amount, not increase.
It's also almost 93 million barrels more than were in storage this time last year, which is traditionally a time of strong demand for oil because of the busy summer driving season. But inventories have been ticking higher since the end of June, Nomura Securities analyst Shigeki Matsumoto said.
"WTI oil prices have plotted a steady downward trajectory since peaking in late June," he said in a note to clients.
The numbers showed an increase of 813,000 barrels at the oil refining hub of Cushing, Okla.,, where virtually every barrel of American oil passes through at some point.
"The fact that Cushing contributed almost one third of the increase added to today's downside response," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note to clients.
The EIA data also showed America imported more oil from abroad, even as domestic producers pump record amounts. Crude oil imports from Saudi Arabia rose to 1.44 million barrels per day last week, up from more than 1.3 million the week before.
"The crude oil inventory rise was driven by a strong rebound in crude oil imports, which neared eight million barrels per day," said John Kilduff, partner at Again Capital LLC in New York.
Despite the oil sell-off and a day after sinking to its lowest level in almost 11 years on Wednesday, the loonie was relatively unscathed on Thursday, holding steady at 76.77 cents US.
With files from Reuters