Article by Stanley Reed published New York Times New York Edition 14 March 2015under the headline:
Oil Prices Drop as Production Hums Along Despite a Brimming Supply
LONDON — Just as the oil market appeared to be stabilizing, the price of crude resumed its descent on Friday.
The drop, of about 4 percent, came after a report from the International Energy Agency warning that oil pouring into tank farms in the United States might “soon test storage capacity limits.”
The agency, whose reports are closely monitored by oil traders, said that overflowing storage “would inevitably lead to renewed price weakness.” American production of oil continues to increase despite recently announced cutbacks in new drilling by producers.
The price of West Texas Intermediate, the American benchmark, fell to around $45 a barrel on Friday, while Brent, the international benchmark, fell below $55 a barrel.
The Department of Energy has proposed adding five million barrels of oil to the Strategic Petroleum Reserve. The purchase, which requires congressional approval, would be added in June and July. But 9.4 million barrels of oil a day are being produced in the United States. Kevin Book, an analyst with ClearView Energy Partners, said that the proposed purchase was not an attempt to support falling prices but instead “appears to derive from a statutory obligation.” read more
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