The United States exported a record amount of crude oil last week

Ann Santiago
February 24, 2019

Although crude prices have ended higher this week, rising USA crude oil production continues to worry investors that the glut of supply in the global oil market could be here to stay for longer while halting crude's upward price trajectory.

(GRAPHIC: U.S. oil production & storage levels link: https://tmsnrt.rs/2Vanxza).

"Regarding yesterday's EIA numbers, we saw a build in crude and a very large build. Cushing and USA production hit an all-time high which we feel is going to go higher in the weeks to come as new pipelines are coming online in the Permian basin", Zahir added.

U.S. West Texas Intermediate (WTI) crude oil futures were at $57.03 per barrel, up 7 cents, but below this week's $57.55 per barrel 2019 high. Global stocks ticked up Friday and US stocks were also pointed higher, with most major benchmarks remained on course to close out the week higher on the back of investor optimism that the USA and China could soon reach a deal to resolve their continuing trade dispute.

Crude oil futures traded higher Friday amid renewed optimism that the United States and China could make progress in trade talks, analysts said.

Both oil benchmarks have risen this year after the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, began to cut output to prevent a supply glut from growing. "While a glut is taking hold in US crude stocks, product stockpiles inched lower thanks to robust domestic demand", Mr. Brennock added.


At the same time, two key OPEC members exempt from the deal - Venezuela and Iran - have seen production fall as a result of USA sanctions on both of those countries' oil industries.

At the same time, the USA dollar, which tends to have an inverse relationship with dollar-denominated commodities like oil, lost steam Friday and was 0.1% weaker compared with a basket of 16 of its peers, according to the WSJ Dollar Index.

Friday's dips at least temporarily halted a rally that pushed crude prices this week to their highest for 2019 so far amid the supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC). America is the only country to ever reach production of 12 million bpd.

OPEC and some non-affiliated producers such as Russian Federation agreed late past year to cut output by 1.2 million bpd to prevent a large supply overhang from growing.

Goldman Sachs said in a note it expects OPEC output to average 31.1 million bpd in 2019, down from 31.9 million bpd.

USA crude oil stocks rose by 1.3 million barrels in the week to February 15 to 448.5 million, according to a weekly report by the American Petroleum Institute on Wednesday.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER