Reuters: Oil prices dip as record U.S. exports undermine OPEC-led efforts to cut supply

09:00, 25 February 2019
Economy
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REUTERS

International Brent crude oil futures were at $66.88 a barrel at 0449 GMT, down 24 cents, or 0.4 percent, from their last close, Reuters said.

They ended Friday little changed after touching their highest since Nov. 16 at $67.73 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were at $57.11 per barrel, down 15 cents, or 0.3 percent, from their last settlement. WTI futures climbed 0.5 percent on Friday, having marked their highest since Nov. 16 at $57.81 a barrel.

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Traders said the dips were a result of ample oil supply amid surging exports from the United States, forcing other producers especially in the Middle East to start offering their crude at discounts.

Under pressure from a surge in U.S. supply, Abu Dhabi's flagship Murban crude has sold at a discount in Asia to its official selling price (OSP) for four straight months - the longest stretch in nearly two years.

Cargoes bought for loading in the first four months of 2019 were sold at discounts ranging from 5 cents to 40 cents a barrel, even as producer Abu Dhabi National Oil Company (ADNOC) cut the grade's benchmark price for four consecutive months.

U.S. crude oil production has hit a record 12 million barrels per day (bpd), an increase of more than 2 million bpd since early 2018. Exports hit a record 3.6 million bpd this month.

The surge in U.S. oil output counters efforts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) to cut output in order to tighten the market and prop up prices.

The OPEC-led cuts as well as U.S. sanctions against Iran's and Venezuela's oil exports pushed oil prices to 2019 highs last week.

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