Crude oil prices drifted lower on Thursday, after International Energy Agency’s report said global oil supply reached a record high in August.
According to the report from IEA, global oil supply reached a record 100 million barrels per day in August, with output from OPEC countries and Russia rising to a nine-month high.
The jump in production to 32.63 million barrels per day, was due largely to higher output from Libya, Iraq, Nigeria and Saudi Arabia, said the report from IEA. Higher production in the U.S., lifted supply from non-OPEC countries by 2.6 million barrels per day, the report showed.
However, the agency said that production may drop going forward due to falling output from Iran and Venezuela.
It is still feared that hurricane Florence, which is headed towards South and North Carolina may cause flooding and power interruptions. However, it is hoped that there won’t be a significant supply shortage.
Crude oil futures for October ended down $1.78, or 2.5%, at $68.59 a barrel on the New York Mercantile Exchange. On Wednesday, crude oil futures ended up $1.12, or 1.6%, at $70.37 a barrel, the best settlement price in about eight weeks.
Data from U.S. Energy Information Administration that showed a notable drop in crude inventories in the U.S., and fears about the impact of hurricane Florence on oil supplies lifted crude oil futures on Wednesday.
According to the weekly report released by the U.S. Energy Information Administration, crude oil inventories dropped by 5.296 million barrels in the week ended September 7, much more than what analysts had expected. Meanwhile, supplies at Cushing, Oklahoma, were down by 1.242 million barrels last week, the EIA report revealed.
The report said that the total U.S. crude oil inventories as of last week, at 396.2 million barrels, was about 3% below the five year average for this time of the year.