West Texas Intermediate (WTI) yesterday plunged below the US$45 on which the national budget is currently pegged. It dropped by US$1.78, or almost four per cent, at US$44.45 a barrel, after going as low as US$44.08 earlier in the day. Benchmark Brent crude closed down US$1.13, or 2.3 per cent, at US$48.47, after a session low at US$48.29.
The price slump was triggered by a report that showed record-high crude oil inventories in the United States. The US Energy Information Administration (EIA) said domestic crude oil stocks rose by almost 9 million barrels last week to reach nearly 407 million, their highest since the government began keeping records in 1982. The American Petroleum Institute, an industry group, had estimated a far bigger growth of nearly 13 million barrels.
The spread between the two crude oils was its largest in a month, with Brent fetching a premium of about US$4 a barrel due to the weaker fundamentals in WTI. crude.