London – AFP – 2/4/2015 – Global oil prices slid Wednesday following a three-day rally as US crude stockpiles struck the highest level for 30 years.
US benchmark West Texas Intermediate (WTI) for delivery in March tumbled $2.92 to $50.13 a barrel compared with Tuesday’s close.
Brent North Sea crude for March shed $2.05 to trade at $55.87 a barrel in London afternoon trade.
WTI had soared $3.48 Tuesday to record its highest finish since December 31, while Brent jumped $3.16 to a similar closing peak, as dealers cheered signs that the oil industry is tightening exploration activities to cap a supply glut.
But data Wednesday from the Energy Information Administration (EIA) showed that US commercial crude inventories jumped last week by 6.3 million barrels to hit 413.1 million — the highest level since 1982 according to data compiled by the EIA.
It was the highest level for 75 years when looking at the data on a monthly basis.
Deep cuts in capital spending by major oil companies, including new announcements Tuesday by BP and BG Group, had suggested there would be tighter supplies in the future.
The Baker Hughes North America rig count report for the week to January 30 showed a drop of 128 rigs to 1,937. That compared with 2,393 a year ago.
Some analysts however remain doubtful that the current oil price rebound will be sustained as supplies still outweigh demand in the immediate term.
The oil market has lost more than half its value since June largely owing to a surge in global reserves boosted by robust US shale oil production.
The problem was exacerbated in November after OPEC decided to maintain output levels despite plunging prices.
The 12-nation Organization of Petroleum Exporting Countries (OPEC) cartel pumps about 30 percent of global crude supplies.