Oil prices dip on rising US crude inventories, record production

SINGAPORE: Oil dipped on Thursday, weighed down by swelling US crude inventories and record weekly US production that undermined efforts by OPEC to cut supplies, although potential new US sanctions against Iran kept markets on the edge.
Brent crude oil futures LCOc1 were at $73.31 per barrel at 06:54 GMT, down 5 cents from their last close.
US West Texas Intermediate (WTI) crude futures were down just 1 cent at $67.92 per barrel.
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 in the week to April 27, the highest level in 2018.
“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.
US oil production also rose to a 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 than top exporter and Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries (OPEC).
Only Russia pumps more, at around 11 million bpd.
The United States could surpass that level soon too, as oil firms have ramped up January to May production faster than at any other time in at least half a decade, Thomson Reuters Eikon data shows.
US drilling for new production is increasing, encouraged by rising prices following OPEC’s production curbs.
State-owned producer Saudi Aramco said on Wednesday it has raised the June price for its Arab Light grade for Asian customers by 70 cents a barrel versus May to a premium of $1.90 a barrel to the Oman/Dubai average, the highest since August 2014. Overall, OPEC produced around 32 million bpd of crude in April, according to a Reuters survey, implying that its production is slightly below its target of 32.5 million bpd, due largely to plunging output in Venezuela. — Reuters