On Wednesday, U.S. crude production rallied to its highest level rising above Saudi Arabia as the second biggest producer in the world. Oil prices hit a one-month low during the trading session following reports of a rise in U.S. shale output.
High U.S. Crude Production
According to the Energy Information Administration, U.S. crude production has jumped by 332,000 barrels per day in the week that ended last February 2 to a total of 10.25 million barrels for the period. Oil production in the country have last rallied to the same levels was last November 1970 when output traded above 10 million barrels per day.
The United States is currently the biggest consumer of oil in the world. However, crude imports in the country have fallen after the recent rise in the production and inventories last week.
The Energy Information Administration forecasted a production of around 1.6 million barrels per day this year in the United States and is expected to go up by as much as 11.2 million barrels per day next year which is higher than Russia’s current production.
The recent production number report has surpassed Saudi Arabia’s production average of 9.92 million barrels per day back in December according to the OPEC’s monthly oil market report data which was released last month.
Oil Prices Movement
On Wednesday, oil prices traded down for the fourth consecutive session following reports that the crude and fuel stockpiles in the U.S have risen last week with drillers in the states planning to increase production further.
Last week, the West Texas Intermediate traded above $60 per barrel since last year and was mostly optimistic at the beginning of the year due to the OPEC announcement that it would extend its agreement to cut daily production by another nine months until the end of 2018
This led oil prices to rally close to $70 per barrel over the past month. However, Energy Information Association stated that the WTI crude would average at around $58 per barrel this year while the Brent benchmark is expected to average $62.39 per barrel in 2018.
On Wednesday, the U.S. West Texas Intermediate traded 2.5% down to $61.79 per barrel to a one month low and has gone down by more than 5.6% this week alone. Brent crude futures also traded 2% lower to trade at $65.51 per barrel which is down below its 50-day moving average for the first time since the past seven months and has not slipped below $66 per barrel since last month. Brent crude futures have lost around 4.5% during the week.
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