Oil Slides toward Weekly Loss on Excess Supply Worries

Oil Slides toward Weekly Loss on Excess Supply Worries

Oil Slides toward Weekly Loss on Excess Supply Worries

Brent futures fell $1.87, or 2.9 percent, to $62.94 a barrel by 12:18 p.m. EST (1718 GMT), its lowest since December 14.

Bit by bit, the US petroleum industry is turning world oil markets inside out.

Due to global rise of oil price, the fuel prices in India were rising since October 2017 when the government cut the excise duty by Rs 2 per litre.

Data on Tuesday showed US crude inventories fell by 1.1 million barrels in the week to February 2 to 418.4 million barrels, helping support the oil price.

Meanwhile, the US Energy Information Administration (EIA) this week said crude production last week rose to a record high of 10.25 million barrels per day (bpd).

U.S. production gains have put it on track to overtake the current output in Saudi Arabia, the biggest producer in the oil cartel.

The U.S. supplies will help reduce China's huge trade surplus with the U.S. and may help to counter allegations from U.S. President Donald Trump that Beijing is trading unfairly.

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Until the early 2000s the USA were oil starved, importing a peak of 12 million bpd.

The key driver for the price decline was news from the United States. At the same time, "you've seen a general strengthening in the USA dollar".

Goldman Sachs raised its 2018 oil price forecasts, projecting that Brent crude will soon top $80, fueled by blockbuster oil demand, a deal among big producers to limit output and U.

The current all-time USA annual output peak was in 1970 at 9.6 million bpd, according to federal energy data. The net impact is seen as bearish for oil prices.

Brent for April settlement dropped 44 cents to $64.37/bbl on the London-based ICE Futures Europe exchange. Energy shares from ExxonMobil Corp.in the U.S.to PetroChina Co.in Hong Kong tumbled after the Dow Jones Industrial Average recorded its biggest point-loss ever on Monday and plunged more than 1,000 points on Thursday, sparking a flight from risk assets. Reserves of gasoline increased by 3.41 million barrels, distillates - by 3.93 million barrels, the U.S. Energy Department reported.

Shale should continue to pressure the market, many analysts say.

"Buyers, like sellers of USA oil, started hedging WTI", said John Driscoll, director of Singapore-based consultancy JTD Energy Services. "Overnight, China imports surged and oil imports hit a record high, but it wasn't enough to balance out the concerns about excess supply", Madden said.

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