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Oil prices fall on rising U.S. crude inventories, record production

Published 03/05/2018, 01:11
Updated 03/05/2018, 01:20
© Reuters. A man walks down the stairs of a petrol storage tank at an oil refinery in Melbourne
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By Henning Gloystein

SINGAPORE (Reuters) - Oil prices fell early on Thursday, pulled down by a rise in U.S. crude inventories and record weekly U.S. production, which is countering efforts by producer cartel OPEC to cut supplies and prop up prices.

U.S. West Texas Intermediate (WTI) crude futures were down 28 cents, or 0.4 percent, at $67.65 per barrel at 0004 GMT.

Brent crude oil futures (LCOc1) were at $73.04 per barrel, down 32 cents, or 0.4 percent, from their last close.

Prices were pulled down by a report from the U.S. Energy Information Administration (EIA) on Wednesday showing U.S. crude inventories jumped by 6.2 million barrels to 435.96 million barrels in the week to April 27, marking a 2018 high.

"The (EIA) report showed a much larger than expected crude build for last week as well as an unexpected build in gasoline inventories," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.

U.S. oil production also hit a fresh record of 10.62 million barrels per day (bpd), a jump of more than a quarter since mid-2016.

GRAPHIC: U.S. oil production and storage levels - https://reut.rs/2riHTd9

The United States now produces more crude oil than top exporter and OPEC-kingpin Saudi Arabia.

Only Russia currently pumps more oil, at around 11 million bpd.

O'Loughlin said that relatively high oil prices, supported by healthy demand and production cuts by the Organization of the Petroleum Exporting Countries (OPEC) to tighten markets, "are encouraging U.S. shale producers to continue ramping up production."

© Reuters. A man walks down the stairs of a petrol storage tank at an oil refinery in Melbourne

GRAPHIC: Russia vs Saudi vs U.S. oil production - https://reut.rs/2rgEXxw

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