On Tuesday, oil prices closed lower over doubts that OPEC would be able to extend cuts in its most recent agreed upon deal. The API report showed a build in barrels of oil, which did not help prices at all.

The expanding production of shale oil in the U.S. is another roadblock for oil prices. WTI crude oil closed lower by 1.8% to $47.34, while Brent Crude oil closed lower by 1.2% to $51.02 per barrel.

Extended Cut

There were doubts from the market that OPEC would be able to extends its output cut deal. The goal was to be able to extend cuts all the way to June of this year. Last year OPEC and non-OPEC countries were able to create a deal.

The deal was to allow each country to reduce the amount of barrels of oil beingproduced. This was done in order to increase oil prices. The deal that was made was to cut up to 1.8 million barrels of oil per day from the market.

Most countries have been able to get close to their stated cuts. Some countries have not stood by their respected deal. What is the holdup then with being able to extend cuts? OPEC will not support extended cuts until other non-OPEC countries come on board.

Another problem is that Russia has not been fully on board with the original deal. Russia pledged to cut up to 300,000 barrels of oil per day. It has not been able to fully live up to that pledge.

Many traders are skeptical that Russia would consider extending cuts past the originally planned six months. Even with the extended cuts, since the deal started, crude stockpiles continue to outpace demand. Analysts state that the OPEC cuts would have to last until the fourth quarter of this year to take full effect.

Crude Stockpiles

The American Petroleum Institute released stockpile data on Tuesday. It showed that there was a build of 4.5 million barrels of crude oil in the week ending March 17. This brought the total barrels of oil to 533.6 million. There are two problems with respect to this reported number.