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This is why oil glut not going away soon

Gary Gladstone | Getty Images

U.S. oil production continues to defy forecasts that it is on the decline, and with refiners processing as much of the stuff as they can, the glut of oil, gasoline and diesel fuel keeps growing.

That should continue to pressure oil prices, which rallied Wednesday because the large weekly build in supply was not quite as gigantic as feared. The U.S. Energy Information Administration reported that crude oil supplies grew by 8.4 million barrels last week, well below the 11.4 million reported Tuesday by the American Petroleum Institute.

The government's lower figure helped trigger a relief rally in crude futures that erased steep losses and pushed the front month futures contract for West Texas Intermediate crude to settle at $32.30. Another factor driving oil higher was reports that possible coordination between Russia and OPEC was discussed by Russian companies. The market continues to speculate that OPEC members may strike a deal on production, but most analysts dismiss that.