WTI slumps below $58 after EIA reports surprise build in US crude oil stocks

• EIA says crude oil inventories in US rose by 1.6 million barrels.
• Crude production in US rose to fresh record high of 12.9 million barrels per day.
• WTI reverses direction and erases all of this week's gains.

Crude oil prices came under strong selling pressure in the last hour after the weekly report published by the US Energy Information Administration (EIA) showed a larger-than-expected in crude oil stockpiles in the US.

US oil production rises to fresh record highs

The barrel of West Texas Intermediate (WTI), which rose to $58.65 earlier in the day, was last seen trading at $57.60, losing 1.2% on the day. With this sharp drop, the WTI erased all the gains it posted in the first half of the week.

The EIA said crude oil stocks in the US increased by 1.6 million barrels in the week ended November 22nd, compared with market expectation for a draw of 418,000 barrels. Further details of the publication revealed that crude production rose 100,000 barrels per day (bpd) to a fresh record high of 12.9 million bpd to further weigh on the WTI.

Earlier in the week, heightened hopes of the Petroleum Exporting Countries (OPEC) extending the output curbs when the group meets in Vienna on December 5th and 6th provided a boost to crude oil prices. Although markets don't expect the group to deepen cuts, reports suggest that there are discussions about whether to have a three or a six-month extension.