You are here: Home » Reuters » News
Business Standard

Oil steadies after big fall, but soaring US crude output still weighs

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - prices steadied on Thursday, supported by healthy demand, after falling the previous day on the back of record U.S. crude production and rising inventories.

Brent crude futures were at $64.46 per barrel at 0506 GMT, up 12 cents, or 0.2 percent, from their previous close. That slight rise came after a more-than-2 percent fall the previous day.

U.S. Intermediate (WTI) crude futures were at $61.26 a barrel, up 11 cents, or 0.2 percent. WTI also fell by more than 2 percent the previous session.

The slight recovery on Thursday came amid a U.S. crude inventory build that was not as big as expected during the current seasonal demand lull at the end of winter, when many refineries shut down for maintenance.

"prices bounced back immediately after the release of the inventories data from the ... (where) the headline figure was better than expected," said Fawad Razaqzada, at

The EIA reported late on Wednesday that U.S. crude inventories rose by 2.4 million barrels in the week to March 2, to 425.91 million barrels, less than the 2.7 million barrel increase analysts had forecast.

On the demand side, U.S. said in a note to clients dated March 7 that the outlook remained for healthy growth, despite recent signs of a slight economic slowdown.

"A still robust growth outlook for 2018 and the recent pattern of 2Q demand acceleration all leave us reiterating our 1.85 million bpd 2018 global demand growth forecast," the said.

Despite this, soaring U.S. production, which last week marked another record, at 10.37 million barrels per day (bpd), is looming over markets.

"Crude is ... under pressure from rising U.S. production which hit a new high last week, now firmly above Saudi Arabia's production level," said William O'Loughlin, at Australia's

At just below 11 million bpd, only produces more than the United States, although the International Energy Agency (IEA) expects even this to change as the is set to surge past 11 million bpd by late 2018.

With U.S. output outpacing demand growth, analysts say the Organization of the Petroleum Exporting Countries (OPEC) and Russia, who together with some other producers have been withholding production in order to prop up prices, are under pressure to keep up the supply restraint, even at the cost of market share.

"OPEC may ... have to extend its production agreement with and co in order to avoid triggering another 2014-style sell-off in prices," said Razaqzada.

(Reporting by Gloystein; Editing by Kenneth Maxwell)

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

First Published: Thu, March 08 2018. 10:47 IST