Oil slips af­ter US pro­duc­tion hits record, crude stocks rise

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NEW YORK — Oil prices slipped on Wed­nes­day, con­tin­u­ing a re­cent slide af­ter surging US crude out­put hit an­other record and do­mes­tic in­ven­to­ries rose more than ex­pected.

NEW YORK — Oil prices slipped on Wed­nes­day, con­tin­u­ing a re­cent slide af­ter surging US crude out­put hit an­other record and do­mes­tic in­ven­to­ries rose more than ex­pected.

The US En­ergy In­for­ma­tion Ad­min­is­tra­tion (EIA) said do­mes­tic crude in­ven­to­ries rose 5.8 mil­lion bar­rels in the lat­est week, more than dou­ble an­a­lysts’ ex­pec­ta­tions.

Crude out­put hit 11.6 mil­lion bar­rels per day (bpd), a weekly record, though weekly fig­ures can be volatile. Most re­cent monthly data for Au­gust showed over­all pro­duc­tion at more than 11.3 mil­lion bpd.

US crude fu­tures fell 54 cents to set­tle at $61.67 a bar­rel, nearly 20% be­low a peak close of $76.41 a bar­rel in early Oc­to­ber.

“The mar­ket has yet to prove that it can hold onto a rally, so the short-term mood is still very neg­a­tive,” said Phil Flynn, an­a­lyst at Price Fu­tures Group in Chicago.

Brent crude, the global bench­mark, set­tled down 6 cents to $72.07 a bar­rel, bounc­ing off its post-EIA ses­sion low on sup­port from ear­lier re­ports that Rus­sia and Saudi Ara­bia are dis­cussing whether to cut crude out­put next year.

While Ira­nian oil ex­ports are ex­pected to fall af­ter US sanc­tions took ef­fect on Mon­day, re­ports from the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC) and other fore­cast­ers have in­di­cated the global oil mar­ket could have a sur­plus in 2019 as de­mand slows. Also, the US granted waivers on Ira­nian sanc­tions to eight coun­tries who im­port that coun­try’s crude.

“The mar­ket is now go­ing to look to OPEC and non-OPEC pro­duc­ers to rein in pro­duc­tion as the US has granted eight coun­tries waivers from sanc­tion, which in essence adds to sup­ply,” said An­drew Lipow, pres­i­dent of Lipow Oil As­so­ci­ates in Hous­ton.

Rus­sia and Saudi Ara­bia, top pro­duc­ers in an OPEC-led al­liance, started bi­lat­eral talks on a re­turn to pro­duc­tion cuts next year, Rus­sia’s TASS news agency re­ported, cit­ing an un­named source. In June, the pro­ducer group de­cided to re­lax out­put curbs in place since 2017, af­ter pres­sure from US Pres­i­dent Don­ald Trump. An­a­lysts said those coun­tries may be more will­ing to cut out­put now that the US midterm elec­tions are over. Mr. Trump, whose Repub­li­can party was fight­ing to re­tain con­trol of congress, had com­plained of higher gaso­line prices.

“OPEC was feel­ing the Trump pres­sure but pro­duc­ers took ac­tion with the think­ing that they just needed to get past the US elec­tion,” said Joe McMonigle, an­a­lyst at Hedg­eye in Wash­ing­ton, in a note Wed­nes­day. “We ex­pect to start hear­ing pub­lic com­ments from OPEC min­is­ters this week­end” about pulling back on pro­duc­tion. —

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