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Another Big Reason to Think Oil Prices Aren't Going Up Soon& m# P/ {5 l) t9 m/ Z& _3 I9 U1 K5 ]3 y
% r% Z6 L) g5 fby Tom Randall
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7 `8 v% `& ?& a1 ]* e. k7 MOil just had its first weekly decline in a month, breaking a rally in crude prices. A bit of context: After what's happened over the last year, "rally" seems a bit of an overstatement.
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1 a4 ^$ ?- n" a2 pOne big factor that may be driving prices down this week: The U.S. is pumping so much oil it's running out of places to stash it. : k; V2 U v6 Y5 i4 k
Crude oil in storage in the U.S. has jumped to the highest levels in at least 80 years, according to a Bloomberg Industries analysis. The EIA this week reported that U.S. inventories rose 7.7 million barrels to 425.6 million. That's more than 20 percent higher than the five-year average.
+ Y& s% w5 ^' Z" q3 D2 HU.S. Oil Inventories Reach 80-Year High5 B) l: W5 t t/ u# C. o' O
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The buildup of supply has been "colossal" and is responsible for oil prices falling this week, Thomas Finlon, director of Energy Analytics Group LLC, told Bloomberg News.
* V) V! P( y- B7 h zWinter weather and refinery outages have contributed to the supply glut. Even when those conditions subside, topped-out inventories and continued production growth may continue to suppress oil prices for the near- and medium-term, according to Bloomberg Industries.
0 z1 B+ a# `$ A' Q& yMeanwhile, the U.S. is pumping oil at a faster pace than any time since 1972.
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U.S. oil production since 1983. Source: EIA
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