US crude oil stockpiles increased by 8.209 million barrels on a week-over-week basis according to a report issued by the Energy Information Administration yesterday. The number, surged past expectations, coming in at more than four times what analysts had forecast. The latest data provides further evidence that rising US output is more than offsetting efforts led by OPEC and Russia to curb the global supply glut by reducing their own output. For the past three months, the benchmark West Texas Intermediate crude has been consolidating in a range between $49.60 and $55.25 a barrel.
Technical analysts reckon that if prices were to break below the key psychological level of $50.00, a selloff towards $42.00 looks increasingly likely. WTI futures are currently trading close to $50.50 a barrel after falling as low at $50.05.