Oil prices fall over 1 percent on recovery in US output

Lloyd Doyle
January 19, 2018

Crude inventories fell by 6.9 million barrels in the week to January 12, compared with analysts' expectations for an decrease of 3.5 million barrels.

USA crude oil stocks slipped for a ninth straight week, following a record drawdown at the USA storage hub in Cushing, Oklahoma, the Energy Information Administration (EIA) said on Thursday.

Brent crude, the global benchmark, had slipped 7 cents to $69.31 by 0943 GMT.

And after cold weather interruptions, USA crude production rose 258,000 barrels per day to 9.75 million bpd last week.

Expectations for an all-time high in US oil production this year just got bigger. On Monday it touched $70.37, the highest since December 2014.

Analysts also pointed to excessive long positions in financial oil markets as a likely brake on any upward momentum in prices, with many traders soon likely to cash in on recent price rises, which have seen crude jump by around 14 percent since early December. "U.S. oil producers will ramp up production in the coming months".

"The upside is now limited for oil prices".

OPEC and its partners made a decision to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.

The agency previously said US output could reach 10 million bpd in February and 11 million bpd in 2019.

Militant group Niger Delta Avengers threatened to attack Nigeria's oil sector in the next few days, potentially hampering supplies in Africa's largest exporter.

The International Energy Agency (IEA), in its monthly report, said that global oil stocks have tightened substantially, aided by OPEC cuts, demand growth and Venezuelan production hitting near 30-year lows.

Other reports by Iphone Fresh

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