Oil prices plunged after a record 14.4-million barrel jump in U.S. crude supply, and they could continue to fall toward $40 a barrel or lower, unless OPEC and global producers make progress on a production deal.
“In the absence of stronger statements or better weekly stats, you’ll see it trending down. The problem is the market is really long at this point,” said Helima Croft, head of global commodities strategy at RBC.
The U.S. government’s Energy Information Administration Wednesday reported the record inventory increase in its weekly report for Oct. 28. The number is volatile, but there was also a two million barrel increase in U.S. imports to 9 million barrels, the highest since 2012.
The increase in supply comes after several weeks of draw downs and a sharp drop in inventories of 14 million barrels in early September, which was blamed on Hurricane Matthew and other storms.