At 1145 GMT, April ICE Brent crude futures were unchanged from Tuesday’s settle at $66.86/b, while the NYMEX December light sweet crude contract was down 15 cents at $63.24/b.
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Between 2010 and 2017, USA oil production rose from 5.5 million barrels a day to 10 million bpd – approaching a record set in 1970 – as shale fields in west Texas and North Dakota lured massive new drilling investments.
North America’s share of the Chinese market jumped to 2 percent past year from just 0.2 percent in 2016, as US crude oil exports to China surged to make America the 14th largest supplier to China, Platts says. Crude output from American wells jumped to 10.25 million barrels a day last week, vaulting the US into the elite of world producers alongside Saudi Arabia and Russian Federation.
Russia, the nation’s top supplier past year, also ramped up imports through its expanded Siberian pipeline last month.
Still, rising United States supply has pressured oil. Markets in Asia followed US markets, with Japan’s Nikkei index closing down about 4.7 percent.
The EIA also said USA crude stockpiles rose by 1.9 million barrels last week. USA crude production jumped to a record 10.25 million barrels a day last week, the most in Energy Information Administration data going back to 1983.
Although Wall Street stocks recorded their biggest intraday drop since 2011 on Monday and measures of volatility hit multi-year highs, oil has not been as disturbed as one would think.
USA crude futures were stronger in post-settlement trading after weekly inventory figures from industry group the American Petroleum Institute showed a 1.1 million barrel decrease in overall crude oil stocks for last week.
Looming over markets, however, was US production soaring past 10 million bpd last week, to 10.25 million bpd.
“Goldman Sachs was the latest to give up its skepticism and predict that Brent would reach $80 a barrel within six months”.
But Mr Jaafar Altaie, managing director of Manaar Energy Consulting said there are still persistent downward threats to the price from the rise in the USA shale oil production and weak compliance among Opec members. Overlooking all the other parameters, with the exception of the exchange rate, a stronger greenback should principally lead to a fall in crude-oil prices, and vice versa.
A majority of analysts are also cautious that the recent gains may not last long as shale producers in the United States are ramping up production in the wake of rising prices while locking in prices in the derivatives market.
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Meanwhile, EIA said on Tuesday that USA crude oil production will be 10.6 million and 11.2 million barrels per day in 2018 and 2019 respectively, marking the highest annual average level in the country. Since mid-2015, China granted crude oil import licenses to independent refineries in northeast China, which have since increased refinery utilization and crude oil imports.
