NEW YORK: The stores of U.S are full as oil supply out grows. Now it is expected that oil and gasoline prices will decrease further.
The United States has been producing and importing 1.1 million barrels of oil regularly for the past eight weeks.
If this keeps up, storage tanks could approach operational limits by mid-April and send crude – and probably gasoline – prices plummeting.
The supply growth may even be speeding up. U.S. crude supplies rose 10.3 million barrels last week, the government said Wednesday, and the largest jump so far this year.
Ed Morse, head of commodities research at Citibank, has suggested oil could fall all the way to $20 a barrel from the current $50. At that price, oil companies, faced with mounting losses, would stop pumping oil until the glut eased. Gasoline prices would fall along with crude, though lower refinery production, because of seasonal factors and unexpected outages, could prevent a sharp decline.
The national average price of gasoline is $2.44 a gallon. That’s $1.02 cheaper than last year at this time, but up 37 cents over the past month.
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