Oil Prices Rise Marginally With U.S. Production Keeping Them Down

Investing.com – Oil prices were mostly flat Friday morning in Asia, rising only marginally as surging U.S. crude output continues to put a lid on prices.

for April delivery were trading at $60.95 a barrel in Asia at 10:30pm ET, down 0.07%. futures for May delivery, traded in London, were up 0.08% at $63.88 per barrel at 11:00am Hong Kong time.

Oil prices have moved quite far from the highs of the beginning of February. WTI started February at $65.80 and Brent started at $69.65.

The Organisation of the Petroleum Exporting Countries (OPEC) has been reducing output by around 1.2 million barrels per day (bpd) since January 2017 in an attempt to ease the global oversupply and stabilize oil markets. Oil output from OPEC fell to a 10-month low in February, but continued increase in oil production in the U.S. has countered OPEC efforts.

increased by 3 million barrels last week, surpassing analyst expectations for a build of 2.1 million barrels, according to the Energy Information Administration (EIA). Gasoline stocks also rose by 2.5 million barrels compared with expectations for a 190,000-barrel drop.

Since mid-2016, U.S production has increased more than 20%, exceeding 10 million bpd. At this rate of increase, the U.S. is set to overtake Russia as the world’s largest oil producer by 2019.

Soaring oil production in the U.S. has simply filled the gap in supply created by OPEC, putting a lid on prices.

Although stocks at the key oil storage facility in Cushing, Oklahoma, has dropped below 30 million barrels for the first time since late 2014, the overall increase in U.S. oil stocks has overshadowed the effects of the destocking at Cushing.

Despite the lid on oil prices, oil markets remain well supported by soaring demand from Asia, particularly China.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.