Oil prices fall on rising US crude inventories, record production

Singapore: Oil prices fell early on Thursday, pulled down by a rise in US crude inventories and record weekly US production, which is countering efforts by producer cartel OPEC to cut supplies and prop up prices.

US West Texas Intermediate (WTI) crude futures were down 28 cents, or 0.4 per cent, at $67.65 per barrel at 0004 GMT.

Brent crude oil futures LCOc1 were at $73.04 per barrel, down 32 cents, or 0.4 per cent, from their last close.

Prices were pulled down by a report from the US Energy Information Administration (EIA) on Wednesday showing US crude inventories jumped by 6.2 million barrels to 435.96 million barrels C-STK-T-EIA in the week to April 27, marking a 2018 high.

“The (EIA) report showed a much larger than expected crude build for last week as well as an unexpected build in gasoline inventories,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

U.S. oil production also hit a fresh record of 10.62 million barrels per day (bpd), a jump of more than a quarter since mid-2016.

The United States now produces more crude oil than top exporter and OPEC-kingpin Saudi Arabia.

Only Russia currently pumps more oil, at around 11 million bpd.

O’Loughlin said that relatively high oil prices, supported by healthy demand and production cuts by the Organization of the Petroleum Exporting Countries (OPEC) to tighten markets, “are encouraging US shale producers to continue ramping up production.”