- US crude inventories decline by 2.8 million barrels to 479.4 million barrels in the week ended May 22.
- WTI falls further below $60 a barrel, while Brent falls toward $61.
US commercial crude inventories declined for a fourth consecutive week last week, as refineries boosted output in anticipation of higher summer demand.
US commercial crude inventories declined by 2.8 million barrels to 479.4 million barrels in the week ended May 22, the government-funded Energy Information Administration (EIA) reported on Thursday. Economists forecast inventories to drop by a little more than 2 million.
Inventory levels remained at record highs compared to the same time of year in at least the last 80 years, the EIA said.
Oil prices edged lower on Thursday, with US crude falling 94 cents to $56.57 a barrel.
Global benchmark Brent crude fell 76 cents to $61.30 a barrel.
Commercial inventories increased at a relentless pace this year, having risen to new record highs for four consecutive months through April.
Oil prices have rebounded by around 40 percent since January, but the rally is not expected to continue, according to Goldman Sachs. The US-based investment firm recently issued a forecast showing that oil prices are likely to remain subdued over the long-term, as the US shale boom and peak OPEC production are expected to keep the market well supplied.
“[W]e believe that the recent price rally is premature,” Goldman’s commodity analysts said in a report released earlier this month. “In fact, we believe that should WTI remain near $60/bbl, US producers would eventually ramp up activity, hedge and complete wells, given improved returns with costs down by at least 20 percent.”
They added, “We therefore believe that prices need to sequentially weaken, to resume the oil market rebalancing as well as help correct the still intact imbalance of too much capital looking for opportunities in the energy space.”