You are here: Home » Reuters » News
Business Standard

Oil hits 11-day low on expected surge in U.S. shale output

Reuters  |  LONDON 

By Karolin Schaps

(Reuters) - prices hit their lowest in 11 days on Tuesday on that U.S. shale output in May is expected to post the biggest monthly increase in more than two years, fuelling concerns that U.S. production growth is undermining efforts to cut oversupply.

U.S. government drilling data showed shale production next month was set to rise to 5.19 million barrels per day (bpd), with output from the Permian play, the largest U.S. shale region, expected to reach a record 2.36 million bpd.

benchmark Brent crude futures were down 34 cents at $55.02 a barrel at 1330 GMT. They touched $54.76 intraday, the lowest since April 7.

U.S. West Texas Intermediate crude futures traded down 25 cents at $52.40 a barrel. Their intraday low was $52.14, also the weakest since April 7.

"EIA (U.S. Energy Information Administration) estimates for a combined 124,000 barrels-per-day growth in U.S. shale production over May have added another bearish element to the market," wrote analysts at JBC Energy, based in Vienna.

More barrels could be on their way to market from U.S. shale fields as financial companies are investing billions in production, a analysis showed.

Members of the Organization of the Petroleum Exporting Countries are cutting production by 1.2 million bpd from Jan. 1 for six months, the first reduction in eight years.

"The battle between the 'sheiks and the shale producers' is far from decided ... with all attempts by OPEC to achieve a lasting production deficit on the market being torpedoed by non-OPEC producers - first and foremost the U.S.," analysts at Commerzbank wrote.

The energy minister of OPEC member the United Arab Emirates said on Tuesday he saw healthy demand growth this year and believed inventories would fall, but that it would take more time to rebalance the market.

He said "conformity" within OPEC and other producers was improving and that the UAE was complying 100 percent with its pledge to cut production.

Saudi Arabia also continues to comply with cuts, tightening February crude exports to the lowest since mid-2015, official data showed on Tuesday.

A preliminary poll showed analysts expected U.S. crude stocks to have fallen in the week to April 14, building on a surprise decline the previous week.

Analysts said they expected crude inventories to have fallen by around 1.5 million barrels last week.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

RECOMMENDED FOR YOU

Oil hits 11-day low on expected surge in U.S. shale output

LONDON (Reuters) - Oil prices hit their lowest in 11 days on Tuesday on news that U.S. shale oil output in May is expected to post the biggest monthly increase in more than two years, fuelling concerns that U.S. production growth is undermining efforts to cut oversupply.

By Karolin Schaps

(Reuters) - prices hit their lowest in 11 days on Tuesday on that U.S. shale output in May is expected to post the biggest monthly increase in more than two years, fuelling concerns that U.S. production growth is undermining efforts to cut oversupply.

U.S. government drilling data showed shale production next month was set to rise to 5.19 million barrels per day (bpd), with output from the Permian play, the largest U.S. shale region, expected to reach a record 2.36 million bpd.

benchmark Brent crude futures were down 34 cents at $55.02 a barrel at 1330 GMT. They touched $54.76 intraday, the lowest since April 7.

U.S. West Texas Intermediate crude futures traded down 25 cents at $52.40 a barrel. Their intraday low was $52.14, also the weakest since April 7.

"EIA (U.S. Energy Information Administration) estimates for a combined 124,000 barrels-per-day growth in U.S. shale production over May have added another bearish element to the market," wrote analysts at JBC Energy, based in Vienna.

More barrels could be on their way to market from U.S. shale fields as financial companies are investing billions in production, a analysis showed.

Members of the Organization of the Petroleum Exporting Countries are cutting production by 1.2 million bpd from Jan. 1 for six months, the first reduction in eight years.

"The battle between the 'sheiks and the shale producers' is far from decided ... with all attempts by OPEC to achieve a lasting production deficit on the market being torpedoed by non-OPEC producers - first and foremost the U.S.," analysts at Commerzbank wrote.

The energy minister of OPEC member the United Arab Emirates said on Tuesday he saw healthy demand growth this year and believed inventories would fall, but that it would take more time to rebalance the market.

He said "conformity" within OPEC and other producers was improving and that the UAE was complying 100 percent with its pledge to cut production.

Saudi Arabia also continues to comply with cuts, tightening February crude exports to the lowest since mid-2015, official data showed on Tuesday.

A preliminary poll showed analysts expected U.S. crude stocks to have fallen in the week to April 14, building on a surprise decline the previous week.

Analysts said they expected crude inventories to have fallen by around 1.5 million barrels last week.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Oil hits 11-day low on expected surge in U.S. shale output

By Karolin Schaps

(Reuters) - prices hit their lowest in 11 days on Tuesday on that U.S. shale output in May is expected to post the biggest monthly increase in more than two years, fuelling concerns that U.S. production growth is undermining efforts to cut oversupply.

U.S. government drilling data showed shale production next month was set to rise to 5.19 million barrels per day (bpd), with output from the Permian play, the largest U.S. shale region, expected to reach a record 2.36 million bpd.

benchmark Brent crude futures were down 34 cents at $55.02 a barrel at 1330 GMT. They touched $54.76 intraday, the lowest since April 7.

U.S. West Texas Intermediate crude futures traded down 25 cents at $52.40 a barrel. Their intraday low was $52.14, also the weakest since April 7.

"EIA (U.S. Energy Information Administration) estimates for a combined 124,000 barrels-per-day growth in U.S. shale production over May have added another bearish element to the market," wrote analysts at JBC Energy, based in Vienna.

More barrels could be on their way to market from U.S. shale fields as financial companies are investing billions in production, a analysis showed.

Members of the Organization of the Petroleum Exporting Countries are cutting production by 1.2 million bpd from Jan. 1 for six months, the first reduction in eight years.

"The battle between the 'sheiks and the shale producers' is far from decided ... with all attempts by OPEC to achieve a lasting production deficit on the market being torpedoed by non-OPEC producers - first and foremost the U.S.," analysts at Commerzbank wrote.

The energy minister of OPEC member the United Arab Emirates said on Tuesday he saw healthy demand growth this year and believed inventories would fall, but that it would take more time to rebalance the market.

He said "conformity" within OPEC and other producers was improving and that the UAE was complying 100 percent with its pledge to cut production.

Saudi Arabia also continues to comply with cuts, tightening February crude exports to the lowest since mid-2015, official data showed on Tuesday.

A preliminary poll showed analysts expected U.S. crude stocks to have fallen in the week to April 14, building on a surprise decline the previous week.

Analysts said they expected crude inventories to have fallen by around 1.5 million barrels last week.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22