Economy

US Crude Oil Exports Could Be at a Tipping Point

US Crude Oil Exports Could Be at a Tipping Point”

Before the OPEC supply cut deal, oil prices fell as Saudi Arabia raised its oil supply to counter rising U.S. shale oil production.

The rate of refinery operating use was little changed at 88.1%, up from 87.8% in the week before. The benchmark hit $61.70 on Wednesday, its highest intraday level since July 2015.

USA crude imports fell last week by 761,000 barrels per day.

U.S. West Texas Intermediate crude oil was trading at $54.52 a barrel, 14 cents higher, after topping out at $55.22 earlier in the session.

"Compliance as a whole for OPEC [ended] up being rather strong", said Mark Watkins, a regional investment manager at US Bank. So, rising U.S. exports may undo OPEC's efforts to raise worldwide oil prices. Oil prices have been rallying on expectations that the producers will extend the deal, which is set to expire in March, through the end of 2018.

The energy ministers of Russian Federation and Saudi Arabia, the world's top oil producers, were expected to travel to Tashkent, Uzbekistan, on Thursday night, two sources told Reuters.

Data on Wednesday showed that USA oil production grew by 46,000 barrels a day (bpd) to 9.55 million bpd, not far off the June 5, 2015 record high of 9.61 million, while weekly US crude oil exports rose to an all-time high of 2.13 million barrels per day.

Oil prices have also been supported by a decline in U.S. inventories, despite rising output.

Goldman Sachs said it expected year-on-year US oil production growth of 0.8 million to 0.9 million bpd at year-end 2017.

Traders said this was due to USA crude trading at a wide discount to Brent, making exports attractive.

The American Petroleum Institute (API) crude oil inventories reported a massive draw of 5.1 million barrels against an expected draw of 1.4 million barrels.



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