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Oil prices fall as U.S. crude production hits another record

Reuters  |  SINGAPORE 

By Henning Gloystein

SINGAPORE (Reuters) - prices eased on Thursday, dragged down by rising output, although strong demand and a drop in U.S. fuel inventories provided the market with some support.

Brent crude futures , the international benchmark for prices, were at $76.46 per barrel at 0046 GMT, down 28 cents, or 0.4 percent, from their last close.

U.S. Intermediate (WTI) crude futures were at $66.58 a barrel, down 6 cents from their last settlement.

Prices were pulled down by another rise in U.S. production , which hit a weekly record of 10.9 million barrels per day (bpd) last week, according to the (EIA) on Wednesday.

U.S. crude output has risen by almost 30 percent in the last two years, and it is now close to top Russia, which produced 11.1 million bpd overall in the first two weeks of June.

But the rising output came amid strong demand, which traders said prevented crude prices from falling further.

U.S. consumption of gasoline in the rose to an historic high of 9.88 million bpd last week, according to the EIA.

In part because of strong demand, U.S. crude inventories fell by 4.1 million barrels in the week to June 8, to 432.4 million barrels.

Still, U.S. output is now above that of top exporter Saudi Arabia, which currently churns out slightly above 10 million bpd.

(GRAPHIC: U.S. - https://reut.rs/2JJiOzg)

MEETING

The surge in American output puts pressure on other producers, who are losing market share.

Russian and Saudi production has been held back voluntarily since 2017, when the Organization of the Petroleum Exporting Countries (OPEC), together with some non-OPEC producers including Russia, started supply cuts aimed at propping up prices.

With Brent prices up by around 180 percent from their 2016 lows and demand strong, OPEC and may soon end their voluntary supply cuts.

OPEC, together with Russia, will officially meet in on June 22 to discuss its production policy,

U.S. said OPEC and its partners had "largely achieved their stated objective of rebalancing the "

With demand for oil strong, said the group's "production is likely to creep higher."

OPEC's and will also have the chance to talk before the meeting.

and are set to open the football world cup, which kicks off in Russia on Thursday.

"The two producers' ministers plan to discuss the issue during tomorrow's game between the two countries," said.

(Reporting by Henning Gloystein; editing by Richard Pullin)

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

First Published: Thu, June 14 2018. 06:34 IST
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