Published: Mon, June 04, 2018
Money | By Hannah Jacobs

Crude oil eases on record US production, OPEC supply hopes

Crude oil eases on record US production, OPEC supply hopes

Iran's light crude oil price rose 43 cents in the week ended on May 25, to continue its upward trend for third consecutive weeks.

West Texas Intermediate for July delivery traded at $66.99 a barrel on the New York Mercantile Exchange, down $1.58, at 9:16 New York. For the week, WTI was on track for a 2.5% fall, adding to last week's near 5% decline and shrugging off a 3.6 million-barrel drop in United States crude stockpiles last week.

Net U.S. crude imports fell last week by 959,000 bpd as exports jumped 431,000 bpd to 2.2 million bpd.

Oil prices decline for third consecutive on the background of statements by Saudi Arabia and Russia's readiness to increase production, a new jump in drilling activity in the U.S. and a record year of sales of hedge funds in the futures market.

Over the last four weeks, motor gasoline product supplied averaged about 9.7 million barrels per day, up by 0.8 percent from the same period past year.

The spread between Brent crude oil futures contracts and U.S. WTI stood at its widest for three years on Friday with the latter set for a second consecutive week of declines as U.S. oil output comes close to matching that of top producer Russian Federation.

Monthly data from the Energy Information Administration showed crude production rose 2.1% to 10.474 million barrels a day in March, from February.

At 0513 GMT, July WTI crude oil is trading $65.71, down $0.10 or -0.15% and August Brent crude oil is at $76.47, down $0.32 or -0.42%.

The premium doubled in about a month as a lack of pipeline capacity in the USA traps much of the output inland.

Now OPEC is facing the problem, if we really want to choke off American production, how low does the price have to go?'

Russia's largest oil producer Rosneft says it will be able to restore 70,000 barrels per day (bpd) of oil output in just two days if global production limits are lifted.

Instead, he noted that Venezuela's output has fallen by about 500,000 bpd this year and could drop by the same amount by the end of 2018, while USA drillers would struggle to boost output by more than 1.2 million bpd: "So we need every last barrel of those supplies to take us to where we need to balance the market".

US drillers added two oil rigs in the week to June 1, bringing the total to 861, the most since March 2015, General Electric Co's (GE.N) Baker Hughes energy services firm said on Friday.

There were 197 gas-seeking rigs and two miscellaneous rigs, creating a total rig count of 1,060, up 144 from this time previous year, the highest count since March 2015.

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