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Written by Sumit Roy  |

May 17, 2012

Crude Oil Report: Brent Plunges To Lowest Level Of 2012, Could Fall To $100 As US Weighs Reserve Release

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U.S. crude oil production edged up to 6.149 mmbbl/d, a fresh 13-year high. Output has been rising swiftly thanks to surging production in unconventional oil plays. Year-to-date, production has been up 337 bbl/d, or 6.1 percent, year-over-year.

Inventories at the NYMEX delivery point in Cushing, Okla., rose by 1 million barrels to a record 45.1 million barrels, or 68 percent of the EIA’s estimate of capacity. Overall Midwest inventories rose by 0.3 million barrels to 107.1 million barrels, or 79 percent of estimated storage capacity.

Front-month WTI calendar spreads remained in contango at -$0.38.

Front-month Brent calendar spreads remained in backwardation at +$0.48.

West Texas Intermediate’s discount to Brent fell week-over-week to -$15.25 from -$15.65. WTI’s discount to Louisiana Light Sweet fell to -$11.85 from -$14.