High crude oil inventory levels, global economic growth uncertainty and market volatility have helped push crude prices to a 13 year low.
According to the EIA, these factors, plus the potential for additional crude oil supply to enter the market have played a part in pushing US crude prices to below $30 per barrel.
Both crude and petroleum product inventories, both domestic and internationally, have been growing since mid-2014 and are above five-year averages for this date.
Even though there is still traditional, on-land storage space available, higher inventory levels and expectations for global inventories to continue building in 2016 are lowering crude oil and petroleum product prices for near-term delivery.
Total US commercial crude oil inventories at the end of January were 503 million barrels. This marks the first time that US inventories exceeded 500 million barrels.
At the Cushing hub in Oklahoma, the delivery point for WTI futures contracts, storage inventories are 23 million barrels above the five-year average.
Since 2014, when the market shifted from backwardation to contango, trading for front month contracts has changed. Through January 2016, Brent and WTI front month prices traded on average about $8 per barrel lower than future prices for delivery one year out.