Investing.com – Oil prices slid on Thursday morning in Asia, despite in the U.S. and the approach of Hurricane Florence to the country’s east coast.
Futures for November delivery slipped 0.48% to $79.34 per barrel at 9:29PM ET (01:29 GMT), while for October delivery also dropped 0.53% to $70, giving up some sharp gains from the trading day in North America.
U.S. crude inventories declined by 5.3 million barrels in the week to Sept. 7 to below 4 million barrels, the lowest since February 2015 and around 3% below the five-year-average for this time of year, according to a report from the U.S. Energy Information Administration (EIA) released on Wednesday.
U.S. crude oil production dropped by 1000,000 barrels per day (bpd), to 10.9 million bpd.
Stephen Innes, head of trading for Asia-Pacific at Oanda, said the inventory data revealed “a much deeper drop than analyst’s expectations… propelling Brent briefly above the fundamental and psychological $80 barrel for the first time since May, and was equally as supportive for the WTI contract.”
The U.S. Department of Energy released preliminary estimates on Wednesday, which indicated that the country has become the world’s largest producer of crude oil for the first time since 1973. Texas is reported to be the epicenter of the shale boom. The EIA expects U.S. production to exceed Russia’s and Saudi Arabia’s through 2019.
“That changed the game for the U.S. It meant we could be resilient and competitive,” said BP (LON:) Capital Fund Advisors Portfolio Manager Ben Cook.
OPEC also published a report on Wednesday, in which it for 2018 by around 20,000 bpd, due to slower-than-expected performance in Latin American and the Middle East in the second quarter. Global oil demand growth stands at 1.62 million bpd and total global consumption is at 98.82 million bpd this year.
In the report, OPEC cited concerns that can affect the oil market: “A combination of monetary tightening from G4 central banks, the weakening financial situations in some emerging and developing economies, rising trade tensions and ongoing geopolitical concerns in some parts of the world constitute challenges to the current global economic growth trend.”
The looming U.S. on Iran, the world’s fifth biggest oil exporter, is expected to lower the supply starting from November. The country is reported to start store oil in its tankers ahead of the sanctions.
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Source: Investing.com
