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Oil prices hit as US data raises oversupply fears | |
(about 1 hour later) | |
Oil prices have slipped after official US government data showed an unexpected rise in oil stocks last week. | Oil prices have slipped after official US government data showed an unexpected rise in oil stocks last week. |
The price of Brent crude dropped 1.2% to $56.24 a barrel, while US crude oil was down 0.4% after dipping below $50. | The price of Brent crude dropped 1.2% to $56.24 a barrel, while US crude oil was down 0.4% after dipping below $50. |
US crude oil stocks unexpectedly rose by 2.5 million barrels last week, according to Energy Information Administration data. | US crude oil stocks unexpectedly rose by 2.5 million barrels last week, according to Energy Information Administration data. |
Analysts had expected a drop of 2.3 million barrels, and said the data had reinforced fears of oversupply. | Analysts had expected a drop of 2.3 million barrels, and said the data had reinforced fears of oversupply. |
"It's a very big surprise to see this type of a build [increase] at this time of year," said Tariq Zahir, founder at Tyche Capital Advisors. | "It's a very big surprise to see this type of a build [increase] at this time of year," said Tariq Zahir, founder at Tyche Capital Advisors. |
The data comes after oil cartel the Organisation of the Petroleum Exporting Countries (Opec) reiterated again this week that it intended to maintain its current rate of oil output, a move aimed at maintaining its market share. | The data comes after oil cartel the Organisation of the Petroleum Exporting Countries (Opec) reiterated again this week that it intended to maintain its current rate of oil output, a move aimed at maintaining its market share. |
Previously, Opec has reacted to falling oil prices with a cut in output, a move that typically boosts the price. | Previously, Opec has reacted to falling oil prices with a cut in output, a move that typically boosts the price. |
The oil price has now fallen by almost half over the past year, with the price around $110 per barrel in June. | The oil price has now fallen by almost half over the past year, with the price around $110 per barrel in June. |
Production from North American shale companies has increased the supply of oil and gas, helping to depress prices. | Production from North American shale companies has increased the supply of oil and gas, helping to depress prices. |
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