NEW YORK, Oct. 21 (UPI) — A downbeat oil market assessment from the World Bank and lingering signs of an oversupplied market pushed crude oil prices down sharply in Wednesday trading.
In a late Tuesday report, the American Petroleum Institute reported U.S. crude oil inventories rose by a little more than 7 million barrels last week. The week prior, API said U.S. crude oil inventories increased by 9.3 million barrels.
Data suggest slight improvements in the U.S. and global economies aren’t enough to draw on the surplus of oil in storage. In response, crude oil prices retreated sharply in early Wednesday trading.
The price for Brent crude oil dropped 1 percent from the previous close to $48.21 per barrel, down about 2.7 percent for the month. West Texas Intermediate, the U.S. benchmark price for crude oil, was down 1.9 percent from Tuesday to $45.42 per barrel, off 2.4 percent from Oct. 1.
In a Tuesday report, the World Bank said it was lowering its full-year forecast for crude oil prices by $5 per barrel to $52 per barrel.
“We see a five-year-long slide in most commodity prices continuing in the third quarter of 2015,” John Baffes, senior commodities research for the bank, said in a statement. “There are sufficient inventories of oil and other commodities and demand is weak, especially for industrial commodities, which is why prices may stay persistently low.”
Technical experts from members of the Organization of Petroleum Exporting Countries are meeting in Vienna to discuss current market dynamics. A November decision by member states to keep production static added further downward pressure to crude oil prices. Despite the looming return of Iran, no major production announcements are expected from the meeting.
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