EIA's weekly US Petroleum Report, released earlier today, shows that stocks of oil rose again last week. However, the amount of crude oil in commercial storage tanks increased by a modest 5.3 million barrels to 489.0 million. This was more than analysts' expectations of a 2.9 million barrel increase.
US oil production fell for the second consecutive week and has now fallen in three out of the last four weeks. Indeed, US oil output has actually contracted over the last four weeks. Admittedly, the weekly production data are only preliminary and are quite volatile, but the EIA also expects oil output from shale formations to fall in April and May.
Today's data provide more evidence that US oil production is beginning to decline in response to lower prices rather than weather-related blips.
"The upshot is that lower prices seem to finally be having a noticeable impact on US oil production, which should feed through into fewer barrels of oil being put into storage and, eventually, a drawdown of stocks." - said Capital Economics
