Energy stocks that surged earlier in the week after tensions rose in the Middle East gave back some of their gains on news that crude inventories, despite explorers idling more rigs, have climbed to the highest level in at least 80 years.
Crude supplies rose 961,000 barrels to 488.2 million last week, according to an Energy Information Administration report Wednesday, putting them at their highest level since 1930.
At the same time, the number of active oil rigs fell to 555, the lowest in five years, according to data compiled by Baker Hughes, the Houston-based oilfield services company.
On Wednesday, the price of U.S. crude rose 17 cents to $43.04 a barrel. Brent crude, a benchmark for international oils, went up five cents to $46.17 a barrel. Oil prices jumped on Tuesday after Russian President Vladimir Putin said Turkey’s decision to shoot down a jet near the Syrian border would have “serious consequences.”
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But NRG Energy, for example, ended up losing 44 cents to close at $12.18 on Wednesday while Conoco Phillips dropped 94 cents to $54.38.
Overall, oil has slumped 42 percent in the past year amid speculation a global glut will be prolonged as the Organization of Petroleum Exporting Countries pumps above its collective target. U.S. crude stockpiles are more than 100 million barrels above the five-year seasonal average.
“There was a further decline in the rig count in response to the drop in prices, and that’s not enough to rebalance the U.S. market, much less the global one,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “Crude supplies continue to rise even with a fall in the number of rigs.”
Rigs targeting oil in the U.S. fell by 9 to 555, extending a five-year low after more than 100 were idled since the start of September, Baker Hughes said on its website Friday. Natural gas rigs were trimmed by 4 to 189, bringing the total down by 13 to 744.
Crude stockpiles in the U.S. have risen to 488 million barrels, the most in November since the Texas oil boom of 1930. Global inventories are at a record of almost 3 billion barrels because of strong production in the Organization of Petroleum Exporting Countries and elsewhere, the International Energy Agency said.
America’s oil drillers have idled more than half the country’s rigs since last October as the world’s largest crude suppliers battle for market share. The crude pumped out of U.S. shale formations helped create a glut that’s pushed prices down by more than 50 percent since June 2014.
This report includes material from the Associated Press and Bloomberg News