Published: Tue, March 13, 2018
Finance | By Loren Pratt

Global crude oil prices fall on relentless rise in US crude output

Global crude oil prices fall on relentless rise in US crude output

Later today, we'll see USA stockpile data from the American Petroleum Institute.

Futures were little changed, after dropping 1.1% on Monday.

Energy Information Administration data shows that exports have averaged about 1.5 million barrels over the past six months, nearly double the level in the previous six months, with Asia being the biggest buyer.

Sentiment is being soured further as United States inventories are forecast to have risen for a third week.

On January 25 however, oil was trading for $66 per barrel, meaning that this week's decline has been long in coming.

The most significant price action this week is likely to take place after the release of the American Petroleum Institute's weekly inventories report on Tuesday and Wednesday's U.S. Energy Information Administration report.

Oil prices regained some ground on Monday afternoon but remained down as investors grappled with persisting concerns about rising U.S. output, while demand for U.S. Treasuries stayed strong despite increased supply. U.S. West Texas Intermediate (WTI) crude futures fell 27 cents to $61.77 a barrel. They have almost reversed declines in recent weeks as investors had begun to fear higher wages might lead to price pressures.

Total volume traded was about 53% below the 100-day average.

Brent crude, the benchmark for more than half the world's oil, traded at $65.07 a barrel at 10:11 London on Monday, compared with about $45 in June.

"We are maintaining a bearish trading stance in anticipation of a range in nearby WTI between about $58 and $63, Jim Ritterbusch, president of Ritterbusch and Associates, said in a note".

Total American output has passed 10 million barrels a day, beating a record set in 1970.

Traders are saying the early price action was related to a drop in the number U.S. rigs drilling for more production and Friday's robust U.S. Non-Farm Payrolls report, which could lead to increased demand. Furthermore, the futures hub at Cushing, Oklahoma is also expected to show a build.

Workers at Libya's Zawiya oil export terminal started a strike on Monday over delayed salary payments, according to people with knowledge of the matter, who asked not to be identified because they are not authorized to speak to media. Gasoline stocks were down (-0.8m vs. -1.7m expected) while distillate stocks (-0.6m vs. -1.0m expected) were down.

Follow Fin24 on Twitter, Facebook, Google+ and encourages commentary submitted via MyNews24. "You can consider that a good thing, given this year will see more and more Treasuries issued".

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