The oil glut is growing again, renewing the pressure on prices

Still going.
Still going.
Image: AP Photo/Matthew Brown
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It’s normal for US stockpiles of crude oil to increase this time of year, when energy companies start closing refineries for maintenance after the summer driving season. But the latest statistics (pdf) from the US Energy Information Administration show a glut that’s anything but normal.

In the week ended Oct. 2, American inventories of crude oil (excluding the Strategic Petroleum Reserve) reached 461 million barrels, up 3.1 million from the previous week. You could go back to 1935 and not find another example of when US stockpiles at this time of year were as high as they are now.

Levels did, however, continue to decline from the records reached this past spring.

This was of little comfort to investors. US benchmark West Texas Intermediate crude lost all of its gains for the day immediately after the latest weekly report came out today (Oct. 7) at 10:30am EDT:

It seemed like OPEC’s ongoing battle with US shale producers would have been enough to lift prices, as the latter has been cutting production, but the conflict didn’t happen in a vacuum. Iran’s nuclear energy deal means it might be able to start exporting more crude, and Russia has been pumping away, so much so that it has reportedly met with Saudi Arabia about cooperating on production quotas.