Oil Continues its Roller Coaster Ride
The price of oil has enjoyed a nice rebound as of late, but this week, oil prices fell again as inventories grew higher than what forecasters predicted. The drop in oil, which dipped 3.8% this week, comes on the heels of a U.S. government report which showed American stockpiles hitting 425.6 million barrels last week. That’s a 7.7 million barrel increase from the previous week, more than double the amount projected by analysts.
West Texas Intermediate (WTI) closed under $51, while Brent crude, the international standard, ended the day just above $60. Oil has rallied over the past month, with Brent gaining 35 percent from a mid-January low as traders covered short positions after a 60 percent crash since June. Analysts have been closely monitoring the drop in active rig counts since oil’s precipitous fall that started last year.
Continued drops in the oil rig count could send prices higher, as OPEC continues its strategy of not cutting production in order to preserve marketshare, despite a global oil glut. Currently the number of U.S. rigs drilling for oil are at three-year lows.