Oil loses as rising US output disrupts tightening market

singapore — Oil prices gave up earlier gains as the relentless rise in US crude production threatens to undermine efforts led by Opec to tighten the market.

Brent crude futures were at $69.34 per barrel at 0750 GMT, down 13 cents, or 0.2 per cent from their last close. US West Texas Intermediate (WTI) crude futures were at $65.13 a barrel, down 4 cents from their previous settlement. Both benchmarks on Wednesday hit their highest levels since early February, having risen around 10 per cent from March lows. An overall mood of confidence in the oil market is being tempered by US crude production, which climbed to a fresh record of 10.4 million barrels per day (bpd) last week, putting the United States ahead of top exporter Saudi Arabia and within reach of Russia’s 11 million bpd.

Despite the relentless rise in US output, up by almost a quarter since mid-2016, traders said oil markets remain well supported. In a sign of healthy demand, US crude inventories fell 2.6 million barrels in the week ended March 16 to 428.31 million barrels, the Energy Information Administration (EIA) said late on Wednesday.

“Inventory data for last week showed a surprise crude draw as well as significant drawdowns in both gasoline and distillates inventories,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities. —