Thursday, October 6, 2022

Crude oil eases for second day on rising US production

Crude oil eases for second day on rising US production

SINGAPORE - Crude oil futures slid for a second session on Thursday, moving away from a one-month high touched briefly in the last session as rising US production stoked worries about global oversupply.

Benchmark Brent crude futures slid 4 cents, or 0.1 percent, to $55.82 a barrel by 0231. The market had climbed to a one-month high of $56.65 on Wednesday before losing ground.

US West Texas Intermediate crude futures were down 5 cents, or 0.1 percent, at $53.06 a barrel. They touched their highest since March 7 at $53.76 barrel in the course of the previous session.

Traders focused on preliminary US production estimates in the weekly Energy Information Administration (EIA) report that suggested domestic output is still climbing. The report also showed stockpiles at the US crude hub at Cushing, Oklahoma, rose 276,000 barrels in the week.

Still, data showed an unexpected drop in overall US crude inventories, which fell in the week by 2.2 million barrels as imports declined by 717,000 barrels a day. 

"We saw a bit of reversal in oil prices and it came despite some positive news," chief market strategist at Sydney's CMC Markets. "It does appear that there is bit of focus on the data that came alongside inventory numbers which showed further increase in US production."

Brent and WTI have rallied in recent sessions after Saudi Arabia was reported to be pushing fellow OPEC members and some rivals to prolong supply cuts beyond June. OPEC and other producers, including Russia, agreed late in November to curb output by around 1.8 million barrels per day in the first half of 2017 to rein in oversupply.

The U.S. data followed bullish reports from the Organization of the Petroleum Exporting Countries (OPEC) nations, which said they had cut March output beyond measures they had promised, according to figures the group published in a monthly report, as it sticks to an effort to clear a glut that has weighed on prices.

However, OPEC also raised its forecast for supplies from non-member countries in 2017 as higher prices encourage US shale drillers to pump more, reducing demand for OPEC's oil this year. -Reuters