Oil prices tumble amid rising US production

Oil prices declined on Thursday amid reports of rising US crude production, with the global benchmark Brent crude slipping to the lowest level this year.

Brent was last trading lower by 0.2 percent at $65.41 per barrel (bbl), while US West Texas Intermediate (WTI) crude fell 0.3 percent to $61.63/bbl.

According to the latest update from the Energy Information Administration (EIA), US crude inventories rose 1.9 million barrels for the week ending February 2 when compared to the previous week.

“Clearly, the data points to an imbalanced market and oil prices have responded by turning sharply lower,” said Fawad Razaqzada, market analyst at Forex.com.

“Brent has now turned negative for 2018,” he added.

Earlier, the EIA had raised its estimates on US crude production to 10.6 million barrels per day (bpd) for 2018, while noting that US output could hit record 11 million bpd in the fourth quarter of this year – a year earlier than previously expected.

However, Dubai-based Emirates NBD Bank in its weekly update noted that the backdrop for crude prices remains relatively supportive, with OPEC production curbs and strong global growth driving market tightness.

“US production climbing to the highest levels in the last 47 years should be counterbalanced by strong global demand in H1 2018,” the lender said.

Write to Nadeshda Zareen at Nadeshda.zareen@argaamplus.com