OIL TRADES NEAR 6-YEAR LOW AMID SURGING U.S STOCKPILES

[Wiljor]

Bloomberg) -- Oil traded near the lowest level in almost six years after government data showed U.S. crude stockpiles expanded to the most in more than three decades.

Futures were little changed in New York after dropping 3.9 percent on Wednesday. Crude supplies in the U.S., the world’s biggest oil user, rose by 8.87 million barrels to 406.7 million last week, according to the Energy Information Administration. That’s the most in records compiled since August 1982. Output rose to the highest level in weekly EIA data.

The supply surge is bolstering speculation the global glut that drove prices almost 50 percent lower in 2014 will persist. Saudi Arabia, the world’s biggest exporter, will continue to keep output high to defend market share, according to Riyadh-based Jadwa Investment Co., while the Organization of Petroleum Exporting Countries is resisting calls to cut production.

“Once again, it’s more supply,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “The market still looks quite weak. If we have a move back to $45, it’s potentially finding a base. It’s just volatile price action within a range.”

West Texas Intermediate for March delivery was at $44.43 a barrel in electronic trading on the New York Mercantile Exchange, down 2 cents at 12:32 p.m. Sydney time. The contract fell $1.78 to $44.45 on Wednesday, the lowest close since March 2009. The volume of all futures traded was about 55 percent below the 100-day average.

U.S. Output

Brent for March settlement rose 13 cents, or 0.3 percent, to $48.60 a barrel on the London-based ICE Futures Europe exchange. It slid $1.13 to $48.47 on Wednesday. The European benchmark crude was at a premium of $4.19 to WTI.

Crude supplies at Cushing, Oklahoma, the delivery point for New York futures, increased for an eighth week to 38.9 million barrels through Jan. 23, the EIA reported Wednesday. That’s the highest level since January 2014.

U.S. production increased by 27,000 barrels a day to 9.2 million, the Energy Department’s statistical arm said. That’s the highest level in weekly estimates that started in January 1983. Output has increased as the combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies in shale formations from Texas to North Dakota.

Oil will recover as early as the first half of this year as production is reduced, Harold Hamm, the chief executive officer of Continental Resources Inc., said. The company, the largest leaseholder and producer in the Bakken shale play of North Dakota and Montana, can weather low prices “forever” as it idles wells, he said in an interview on Wednesday.

Bloomberg.com

[vietnam1969]

Good post Wiljor. This country uses way to much IMO.  I would like to know what % is used for our military on a monthly basis. Probably should have said our government as well.

Edited January 29, 2015 by vietnam1969

[Wiljor]

I pulled this from Wikipedia Vietnam, FYI

The United States Department of Defense is one of the largest single consumers of energy in the world, responsible for 93% of all US government fuel consumption in 2007 (Air Force: 52%; Navy: 33%; Army: 7%. Other DoD: 1%).[1] In FY 2006, the DoD used almost 30,000 gigawatt hours (GWH) of electricity, at a cost of almost $2.2 billion. The DoD's electricity use would supply enough electricity to power more than 2.6 million average American homes. In electricity consumption, if it were a country, the DoD would rank 58th in the world, using slightly less than Denmark and slightly more than Syria (CIA World Factbook, 2006).[1] The Department of Defense uses 4,600,000,000 US gallons (1.7×1010 L) of fuel annually, an average of 12,600,000 US gallons (48,000,000 L) of fuel per day. A large Army division may use about 6,000 US gallons (23,000 L) per day. According to the 2005 CIA World Factbook, if it were a country, the DoD would rank 34th in the world in average daily oil use, coming in just behind Iraq and just ahead of Sweden.[1] The military recognizes that renewable energy can provide improvements in force safety and budget stability as well as mitigate climate change so it has several programs working on deploying alternative energy at major facilities and in forward operating bases. Admiral Samuel J. Locklear has called climate change the biggest concern for the United States military.[2][3]