International oil prices dipped on Friday following United States’ report that its crude output had hit a record 12 million barrels per day (bpd), thereby undermining efforts by Organisation of Petroleum Exporting Countries’ (OPEC’s) efforts to withhold supply and tighten global markets.
On Friday, Brent crude futures sold at 66.87 dollars per barrel at 0326 GMT, down 20 cents, or 0.3 per cent, from their last close. U.S. West Texas Intermediate (WTI) crude oil futures were at 56.84 dollars per barrel, down 12 cents, or 0.2 per cent, from their last settlement.
According to official report on the U.S’ oil output by Energy Information Administration (EIA) released on Thursday , the U.S. crude oil production reached 12 million bpd for the first time last week, indicating that the country’s output has soared by almost 2.5 million bpd since the start of 2018, and by a whopping 5 million bpd since 2013.
America is the only country to ever reach 12 million bpd of production and as its output surges, the country’s oil stocks are also rising.
The EIA had reported that U.S. commercial crude oil inventories rose by 3.7 million barrels to 454.5 million barrels in the week ended Feb. 15, while analysts project that the country’s output would rise further and that oil firms will export more oil to sell off surplus stocks.
According to U.S Citi Bank, the total U.S. crude production is expected to hit 13 million bpd by year-end, with 2019 averaging 12.5 million bpd.
Reacting to the EIA report, the bank stated: “We could be seeing some weeks with 4.6 million bpd of gross crude exports by end-year, adding to this week’s new record” of 3.6 million bpd.
Analysts see Friday’s dips at least temporarily halting a rally that pushed crude prices this week to their highest for 2019 so far despite the supply cuts championed by the OPEC.
OPEC and some non-affiliated producers, including Russia, had agreed late last year to cut output by 1.2 million bpd to prevent a large supply overhang from growing.
Industry analysts also linked the recent price driver to th U.S. sanctions against Iran and Venezuela, two major oil exporters.
