US Oil Production To Break New Records

US Oil Production To Break New Records

On Wednesday, the U.S. Energy Information Administration said crude inventories fell nearly 5 million barrels to 419.5 million barrels last week.

The price for Brent crude oil was down 0.35 percent at 9:19 a.m. EST to $69.02 per barrel.

On Dec. 9, the EIA estimated that US crude oil production could average 10.3 million barrels per day in 2018 - record levels for the United States and roughly 1 million barrels per day higher than estimated 2017 figures.

A market survey of more than 1,000 energy professionals conducted by Reuters in January showed crude price expectations in a range of $60 to $70 per barrel for 2018. Customers buying gasoline at grocery stores and other independent retailers may pay more than those shopping at name-brand outlets after the biggest gasoline pipeline in the US sprung a leak in Alabama on September 9.

Though breaking through the symbolic $70 price level for the worldwide benchmark is music to the ears of some producers who have cut output, higher oil prices are both a blessing and a curse for Russian Federation and many OPEC members that have sought to curb production to keep oil prices relatively stable without causing them to increase so much that they boost investment in North American shale oil production and alternative energies.

The agency also sharply raised its outlook for United States oil production for the coming year it now sees production averaging 10.3 million b/d, or almost 1 mb/d more than in 2017.

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"The decline comes in an environment of a falling US dollar, which is an offsetting factor", he added.

During that meeting, OPEC's biggest producer and the world's top exporter, to kill a global oil glut and stop a five-month slide in prices.

Refinery activity likely dipped last week after having risen to its highest level of 2017, but remained elevated given an incentive to crank out distillates to meet heating fuel demand.

U.S. West Texas Intermediate (WTI) crude futures were at $63.34 a barrel at 0755 GMT, down 46 cents, or 0.7 percent, from their last settlement.

USA refiners have responded to the rising crack spread.

In the physical market, New York Harbor ULSD barges were assessed Thursday at $2.0865 per gallon (/gal), the highest since December 2014. In 2019, crude oil production is forecast to rise to an average of 10.8 million b/d. Also, the dollar fell in a broad sell-off after a report that China was ready to slow or halt its US treasury purchases. So despite these builds, USAC gasoline inventories remain about 1% below the five-year average, the same as back in early November.

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