The main storage facility for crude oil in the U.S is in Cushing Oklahoma. But, it is flooding with rains now. Therefore, affecting the prices of crude oil. It is going up by a percent. The Oklahoma is flooding due to heavy rains.
Before the long holiday weekend, the West Texas Intermediate, WTI agreed upon the pricing. It is now USD 59.14 for one barrel. It has gone up by 51 cents. Also, we can say by 0.9 %.
Overall distribution of crude oil all across U.S is becoming disrupting due to the floods. This is creating a bid on the West Texas Intermediate. This is on confirming with Phillip Streible who is the senior market strategist for RJO Futures based out of Chicago.
Areas like Oklahoma and Arkansas are expecting more rains. Though, the Arkansas River is already flooding. In May Oklahoma received 48 cm of rain. This data is from National Weather Service. Unlike WTI, Brent crude futures agreed upon USD 70.11 for each barrel.
An unbalanced situation between slow economic growth and the Organization of the Petroleum Exporting Countries is responsible for the price fluctuation. It was expected from OPEC to extend the deal of 6 months to put a check on production.
Meeting between OPEC and the allies is happening in June. Therefore, production is expecting an impact.
The U.S output has made Saudi Arabia support production extension. This is on confirming with the vice president of market research at Tradition Energy, Gene McGillian.
There is an overall decline for WTI and Brent happening. Brent futures declined by 4.5% and West Texas Intermediate by 6.4%. It is their biggest loss since December.
The oil price drop is a result of rising U.S. crude oil inventories. Their production is 476.8 million barrels. Memorial Day holiday is delaying the report on exact statistics.