An unexpected increase in U.S. crude oil stocks contributed to pushing down oil prices in early morning trade on Thursday.
For the week ending May 16, “U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.3 million barrels from the previous week,” said a May 21 report from the Energy Information Administration. “At 443.2 million barrels, U.S. crude oil inventories are about 6 percent below the five-year average for this time of year.”
The 1.3 million barrel jump in oil stocks came as markets expected a dip in inventories.
A buildup in inventory happens due to multiple factors, such as an increase in production or a decline in demand. Rising levels of inventory suggest market oversupply or that people are using less fuel than normal. This puts downward pressure on oil prices….