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Another Big Reason to Think Oil Prices Aren't Going Up Soon# L0 C8 E/ L9 `8 X
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by Tom Randall5 U6 q6 @/ {* P8 z! v
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Oil just had its first weekly decline in a month, breaking a rally in crude prices. A bit of context: After what's happened over the last year, "rally" seems a bit of an overstatement.
- r; z# B% e+ GOil 'Rally'
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One big factor that may be driving prices down this week: The U.S. is pumping so much oil it's running out of places to stash it. - n0 T% E' H% u$ R8 q# p. O, U
Crude oil in storage in the U.S. has jumped to the highest levels in at least 80 years, according to a Bloomberg Industries analysis. The EIA this week reported that U.S. inventories rose 7.7 million barrels to 425.6 million. That's more than 20 percent higher than the five-year average.
9 u3 J" q( L) S, U# lU.S. Oil Inventories Reach 80-Year High
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The buildup of supply has been "colossal" and is responsible for oil prices falling this week, Thomas Finlon, director of Energy Analytics Group LLC, told Bloomberg News.
! t( C7 ?5 ?9 |, }- y0 UWinter weather and refinery outages have contributed to the supply glut. Even when those conditions subside, topped-out inventories and continued production growth may continue to suppress oil prices for the near- and medium-term, according to Bloomberg Industries. $ V( w7 ]7 K9 n2 H
Meanwhile, the U.S. is pumping oil at a faster pace than any time since 1972.
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U.S. oil production since 1983. Source: EIA3 {# m" v$ {) \! Z* s
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