Even the US Energy Information Administration's report Wednesday that US crude production reached 10.04 million b/d in November, the highest in 47 years, could be masking tightness in some parts of the market, independent analyst Anas al-Hajji said.
Brent oil prices held near $70 per barrel, supported by strong compliance with output cuts by oil cartel Opec and its ally Russian Federation, as well as expectations for strong demand growth in 2018.
USA crude oil production in November surpassed 10 million barrels per day for the rst time since 1970, and neared the all-time output record, the Energy Information Administration said.
Giovanni Staunovo, a commodity analyst for UBS, told UPI the record-breaking output from the United States would normally send oil prices into negative territory.
Investor sentiment was also boosted by Goldman Sachs' outlook.
The production values presented here are based on EIA's monthly survey of crude oil production, which, for reasons explained in a webinar presented earlier this week, are considered more comprehensive and reliable values of USA crude oil production than the preliminary estimates presented in EIA's Weekly Petroleum Status Report. WTI prices were about $60/bbl last month.
Despite the rise of USA production, global demand remains strong with analysts expecting a growth in global oil demand to be about 1.7 million barrels a day in 2018. In September and October, exports to Asia accounted for 40% of total USA exports of crude oil, averaging 636,000 b/d, or more than double their pre-Harvey levels.
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IHS Markit also doubts there will be an eventual return to robust spending, due to a constrained pipeline system that can't keep pace with growth, and shifting marine fuel specifications that could further reduce the price received for heavy crude.
A Reuters survey shows that OPEC pumped 32.4 million bpd last month, up 100,000 bpd from December.
Exports to Asian countries accounted for 35% of total US exports of crude oil in the first eight months of 2017, averaging 312,000 b/d. China, in particular, started buying up large volumes of US oil in 2017.
"Oil prices have come under pressure because of rising oil production in the US, together with a marginal rebound in the USA dollar index".
"Venezuela pulled OPEC production significantly below target in January", Commerzbank said in a note.
West Texas Intermediate futures added 0.8% in NY. The global benchmark crude traded at a premium of $4.43 to April WTI.