Oil slips as higher U.S. output looms despite dip in drilling
- by Janice Sanchez
- in Money
- — Mar 13, 2018
Brent sweet crude traded at $65.70 per barrel on Monday, an increase of 21 cents or 0.3 percent from its previous close.
U.S. crude production from major shale formations is expected to rise by 131,000 bpd in April from the previous month to a record 6.95 million bpd, the U.S. Energy Information Administration (EIA) said in a monthly report on Monday.
Brent for May settlement fell 38c to $65.11 a barrel on the London-based ICE Futures Europe exchange. If inflation picks up analysts say the Federal Reserve might raise interest rates four times this year.
"Money managers liquidated 15,416 long positions in WTI last week while creating 4,386 new shorts", Dutch bank ING said today.
Crude oil prices slipped into negative territory early Monday, following big gains last week, as broader worldwide trade concerns spill into commodities.
"The market continues to flip back and forth on the idea that increased global demand and a production cut is going to support prices. but USA production, and North American production levels in general, is going to negate a lot of the impact of that", said Gene McGillian, director of market research at Tradition Energy.
The US economy added the biggest number of jobs in more than 1-1/2 years in February, with non-farm payrolls jumping by 313,000 jobs last month, the Labour Department said on Friday.
American explorers cut the number of rigs drilling for oil by four, the first decline since mid-January, Baker Hughes data showed on Friday.
US crude oil production soared past 10 million barrels per day (bpd) in late 2017, overtaking output by top exporter Saudi Arabia.
The United States has become the world's no. 2 crude oil producer, ahead of top exporter Saudi Arabia.
That is more than top exporter Saudi Arabia producers and almost as much as Russian Federation pumps out, at nearly 11 million bpd.
"The longer the deal goes on, it's going to start falling apart", Patterson said in an interview in Singapore, referring to an output-cut agreement between the Organization of Petroleum Exporting Countries and other producers including Russian Federation. Iran wants OPEC to work to keep oil prices at about $60 a barrel as an increase toward $70 will encourage shale oil output, Oil Minister Bijan Zanganeh said, the Wall Street Journal reported.
