Oil price dives as US inventories build up

Inventory data released today showed the amount of oil held in storage in the USA has reached the highest level in 14 years.  A total of 482.4 million barrels is now in storage, up another 10.95 million in a month.  Despite the falling rig count, as existing infrastructure is taken out of service, U.S. crude production is still the highest in decades.  Together with confirmation that Saudi Arabia will not be cutting production and with the prospect of Iran coming back onto international markets as part of the nuclear deal, the price of Brent fell over 3% to $57.30.  Goldman Sachs reviewed their price target on crude and said that their $65 target is unlikely to be met in 2016. The data will dampen global inflationary expectations although US and UK bonds remained almost unchanged as yields have already fallen in the last fortnight.