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Here Are Three Factors That Could Drag Down Oil Prices Even More

Stocks in this article: BP CVX

NEW YORK (TheStreet) -- In the past three weeks the price of West Texas Intermediate crude oil has lost 6% of its value; a barrel is currently priced at around $100.

The recent plunge in oil prices has also dragged down the shares of big oil producers such as BP (BP) and Chevron (CVX).

BP's stock is at $51.84, down 1.7% since the beginning of the month. Shares of Chevron are at $129.35, down 0.9% during July. But will crude oil prices continue to decline in the coming weeks? Following are are three factors that could keep pressure on oil pressures.

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1. OPEC's Oil Supply Remains Stable

OPEC's latest monthly update showed little change in the total output of OPEC member countries. As of June, OPEC's production reached 29.7 million barrels a day, nearly unchanged from previous months. Iraq's oil output fell by only 5%, month over month. This fall in production was offset by modest gains in production in Nigeria and Saudi Arabia. The International Energy Agency also reported little change in OPEC's oil output.

2. U.S Stockpiles Keep Rising

U.S oil stockpiles are also picking up, mainly because of higher production. The chart below shows the U.S oil stockpiles and average weekly price of oil during 2012-2014.

Courtesy of Energy Information Administration

As you can see, the oil storage has increased in the past several weeks, after reaching its lowest level in years back in March 2014. Moreover, the U.S. Energy Information Adminstration estimates that 2014 U.S oil production will rise by 15% year over year. As the stockpiles keep picking up with the rise of production, oil prices are likely to slowly come down.

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