Oil Prices Fall On Concerns Over US Output

Oil Slides as Growing Shale Supply Seen Stabilizing US Hub

"Permian and Bakken shale basins still saw active oil rigs rising by 2 and 3 last week, respectively, and are likely to keep United States oil production on increasing trend", ING said.

Oil prices fell on Monday on expectations that US output will rise this year, erasing earlier gains buoyed by lower weekly USA rig counts and falling USA unemployment.

US West Texas Intermediate (WTI) crude futures were at $61.91 a barrel at 0755 GMT, down 13 cents, or 0.2 per cent. Gross short positions on the New York Mercantile Exchange climbed to their highest in almost a month.

Brent crude, which is the global benchmark of crude oil, had opened 2018 at $64.73. Both the Brent and WTI saw a massive decline as they enter the market this week with a solid 1% decline.

The report followed data from the EIA last week (http://www.marketwatch.com/story/oil-prices-under-pressure-ahead-of-us-supply-data-2018-03-07), which showed an increase of 86,000 barrels a day in total USA crude output for the week ending March 2.

US production is also expected to rise above 11 million bpd by late 2018, taking the top spot from Russian Federation, according to the International Energy Agency (EIA).

OECD upgrades global and Japan growth outlooks for 2018 and 2019
He said: "Investment is coming back, and so this is very good news for good new for jobs and growth across the economies". The latest report lifted growth forecasts for the USA and eurozone economies.

While the U.S.is now pumping more than 10 million barrels a day, surpassing a record set in 1970, that boom is being accompanied by a surge in overseas shipments, helping drain stockpiles at the nation's largest storage hub. "That figure was close to in line with the February average weekly increase of 91,000 [barrels a day] and is still more than four times greater than the pace of production growth in 2017", said Tyler Richey, co-editor of the Sevens Report.

That has undercut some of the enthusiasm for oil, as investors weigh increased U.S. supply against the likelihood that the Organisation of the Petroleum Exporting Countries and non-Opec producers will maintain supply cuts that have been in effect for more than a year.

ING's Patterson agrees that keeping a lid on price hikes is necessary; in an interview in Singapore he said, "We need to see prices in the short-term trade below $60 to reduce that incentive for USA producers".

Oil markets continued to flip back and forth over the past weeks due to excless supply, increasing USA production and soaring global demand.

Crude oil prices are lower today after falling yesterday.

Energy services firm Baker Hughes said on Friday that energy companies last week cut oil rigs for the first time in nearly two months. The dollar tends to have an inverse relationship with oil prices, as a weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.

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