Oil below $70 as United States shale surge looms over bullish banks

  • Oil below $70 as United States shale surge looms over bullish banks

Oil below $70 as United States shale surge looms over bullish banks

Analysts had expected a decrease of 126,000 barrels. A decade ago, in November 2008, production from tight formations accounted for only 7% of total US production. A decade ago, in November 2008, production from tight formations accounted for only 7% of total USA production. EIA's Petroleum Supply Monthly data for October 2017 show that the largest increases in US crude oil exports were to Asia, followed by Europe.

Almost 40 percent of all oil produced in November 2017 came from Texas, which recorded 3,891 million barrels per day.

USA production doesn't look to slow any time soon. As recently as 2011, the nation only produced about 5.5 million barrels a day.

After its best January since 2006, the oil market wrapped up the week on a slump as a stronger United States dollar and weaker stocks added to concerns over booming shale production. But while the world's newest energy superpower is now producing record amounts of crude oil, why are some saying this could be as good as it gets? Exports also rose. The EIA reported exports increased by 354,000 barrels per day to 1.765 million barrels per day. The contract rose 1.7 percent to $65.80 a barrel on Thursday.

Despite surging oil production, prices continue to rise.

Oil crude price Brent mixed was up 76 cents to stand at United States dollars 69.65, but U.S. crude Western Texas oil up USD 1.07, and settling at USD 65.80 per barrel.

The cartel's efforts have helped boost crude prices by more than 50% since mid-2017.

Brent for April settlement was at $69.51 a barrel on the London-based ICE Futures Europe exchange, up 46 cents.

Thursday's price jump followed by a bullish forecast by Goldman Sachs.

Goldman sees Brent crude reaching $75 a barrel over the next three months and will climb to $82.50 within six months. Oil demand growth will still be "solid" in 2018 even as higher prices slow the pace from past year.

ExxonMobil will report on Friday but the company has announced it plans to invest heavily in the Permian Basin in West Texas and increase production by 600,000 of oil equivalent by 2025.

S&P Global Platts Analytics estimates that excess stocks of oil in storage have largely already drained and that the rebalancing is more or less complete, taking into account the growth in demand over the last three years and line-fill volumes required for new infrastructure builds.

Other analysts are not convinced that the markets justify such a high price. Prices were at around $64.28 prior to the release of the inventory data. At the same time, worries over higher shale production added to the downward price momentum.

The six-country monitoring committee, which includes Russia, Kuwait, Venezuela, Algeria and Oman, will meet again in April in Saudi Arabia, with an exact date and venue yet to be decided.