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Oil slips below $64 as U.S. output, higher inventories weigh

Reuters  |  LONDON 

By Alex Lawler

LONDON (Reuters) - slipped below $64 a barrel on Thursday as record U.S. production and rising inventories outweighed a weak dollar and Saudi Arabia's comments that OPEC and other producers were committed to their pact on cutting supplies.

U.S. crude output hit a record 10.27 million barrels per day, the said on Wednesday, making it a bigger than U.S. crude and gasoline inventories rose last week, U.S. data showed.

Brent crude, the global benchmark, fell 78 cents to$63.58 at 1438 GMT, giving up an earlier gain that had extended Wednesday's rally. U.S. crude dropped 51 cents to $60.09.

"What we have now is a bit of a re-adjustment from the price rise we had yesterday, which was a bit overdone," said Olivier Jakob, at "I don't think the data was that supportive," he added, referring to the EIA's inventory report.

Crude inventories rose by 1.8 million barrels in the week to Feb. 9, the U.S. said, an increase that was less than analysts' forecasts.

Gasoline stocks rose by 3.6 million barrels, more than double the forecast.

had climbed on Wednesday and early on Thursday after Saudi said OPEC would do better to leave the market tight than end the deal on cutting output too soon.

"gave his strongest hint yet that exiting the current supply agreement is unlikely to be on the agenda this year," said of broker

Under the deal, the Organization of the Petroleum Exporting Countries agreed to cut output by 1.8 million barrels per day, almost 2 percent of global supply. The cuts started a year ago and will run until the end of 2018.

But the rebound in U.S. production, encouraged by the higher prices delivered by the OPEC-led cuts, is undermining efforts to curb supplies. The EIA expects U.S. production to top 11 million bpd in late 2018, a year earlier than projected last month.

Rising U.S. output also countered support from a weaker dollar, which fell to a 15-month low against the yen. A weaker dollar makes and other dollar-denominated commodities cheaper for holders of other currencies.

(Additional reporting by Henning Gloystein; Editing by and David Evans)

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

First Published: Thu, February 15 2018. 20:35 IST
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