US crude oil production has increased by more than 2 million bpd since early 2018, to an unprecedented 12.1 million bpd.

Singapore: Oil prices fell on Friday amid growing investor jitters over the global economy, after the European Central Bank (ECB) warned overnight of continued weakness and as fresh data showed Chinese exports and imports slumped last month.

With surging US supply also unsettling markets, international benchmark Brent crude oil futures were at USD 65.83 per barrel at 0358 GMT, down 47 cents, or 0.7 percent from their last close.

US West Texas Intermediate (WTI) crude oil futures were at USD 56.32 per barrel, down 34 cents, or 0.6 per cent, from their last settlement.

Financial markets, including crude oil futures, took a hit after ECB President Mario Draghi said on Thursday the economy was in “a period of continued weakness and pervasive uncertainty”. Europe’s economic weakness comes as growth in Asia is also slowing down.

A slowdown in economic growth would also likely result in stalling fuel demand, putting pressure prices.

China’s February dollar-denominated exports fell 21 per cent from a year earlier, coming in far worse than analysts’ expectations, while imports dropped 5.2 per cent, official data showed on Friday.

On the supply side, prices have been receiving support this year from output cuts led by the Organization of the Petroleum Exporting Countries (OPEC). Together with some non-affiliated producers like Russia, the producer group has pledged to withhold around 1.2 million barrels per day (bpd) of supply to tighten markets and prop up prices.

But these efforts are being undermined by soaring US crude oil production, which has increased by more than 2 million bpd since early 2018, to an unprecedented 12.1 million bpd. That makes America the world’s biggest producer, ahead of Russia and Saudi Arabia.

US to become top oil exportor

As a result, US crude exports have also been chasing new records, reaching 3.6 million bpd in February - more than OPEC members like the United Arab Emirates, Kuwait or Iran produce.

Some analysts even expect the United States to soon overtake Saudi Arabia as the world’s biggest oil exporter.

“In a pivotal geopolitical shift, the United States will soon export more oil and liquids than Saudi Arabia,” consultancy Rystad Energy said this week. Liquids include non-crude oil products like natural gas liquids (NGLs).

“The (Saudi) kingdom currently exports some 7 million bpd of crude oil plus about 2 million bpd of NGLs and petroleum products, compared with the US now exporting approximately 3 million bpd of crude oil and 5 million barrels of NGLs and petroleum products,” Rystad said.