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Oil Prices Drop From 7-Week High Amid Rising U.S. Output

Published 22/03/2018, 10:36
© Reuters.  Oil pulls back amid rising U.S. output
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Investing.com - Crude oil futures pulled back from their highest level in nearly seven weeks on Thursday, as lingering concerns over rising production in the U.S. weighed.

U.S. West Texas Intermediate (WTI) crude futures fell 40 cents, or 0.6%, to $64.78 a barrel by 6:35AM ET (1035GMT). The U.S. benchmark jumped $1.63, or 2.6%, in the last session.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., dipped 52 cents, or roughly 0.8%, to $68.94 a barrel, after soaring 3% a day earlier.

Both benchmarks hit their best levels since Feb. 2 earlier in the session.

Oil surged on Wednesday, after data showed that U.S. oil stockpiles fell unexpectedly last week as refinery activity picked up.

However, the report also showed that U.S. crude oil production rose by 0.3% from the previous week to a fresh all-time high of 10.40 million barrels per day, keeping it above Saudi Arabia's output levels and within reach of Russia, the world's biggest crude producer.

Analysts and traders have recently warned that booming U.S. shale oil production could potentially derail OPEC's effort to end a supply glut.

The producer group, along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

In other energy trading, gasoline futures declined 0.9% to $2.000 a gallon, while heating oil was down 1.1% at $1.990 a gallon.

Natural gas futures were little changed as traders looked ahead to weekly storage data due later in the global day amid expectations for a withdrawal of 87 billion cubic feet.

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