USA oil exports have surged the past six months from 442,000 barrels a day in December.
US crude production will average more than 10 million barrels a day for the first time in 2018, breaking a record nearly five decades old and keeping prices from rising as much as previously estimated, government forecasts showed Tuesday.
While there was a dip in OPEC supplies between February and April, a report on Monday by Thomson Reuters Oil Research said OPEC shipments likely jumped to 25.18 million bpd in May, up over 1 million bpd from April. But August Brent prices ended the session 48 cents or 0.96 per cent lower at US$49.47 a barrel. That confounded forecasters who had predicted a drop of 3.5 million barrels, especially a day after preliminary data from the American Petroleum Institute indicated an even bigger drop.
According to a Wall Street Journal analysis of data from the U.S. Energy Department and the International Trade Commission, the U.S. exported 1 million barrels of oil a day during some months so far this year, double the pace of 2016. Why did the API report that crude supply fell nearly 5.0 million barrels and the EIA reported an increase? OPEC members Saudi Arabia and the United Arab Emirates cut diplomatic and transport ties with Qatar, a small producer.
Oil prices have declined by more than 4% since the previous week which is one of the largest weekly declines since May after data on Friday revealed that USA oil drillers are expanding to 11 more active rigs which is the twentieth weekly rise in a row.
Investors are also not happy with the fact that OPEC is still exempting Nigeria and Libya from the production cuts.
Iran is the only OPEC member with room for growth under a current deal to stem production in an effort to balance the market.
The split between Qatar and four other Gulf countries could make OPEC's goal of rebalancing the crude market even more hard.
The U.S. Energy Information Administration report on oil inventories is due this week on Wednesday at 10:30 a.m. EDT. Nationwide crude inventories probably slid 3.25 million barrels for a ninth straight loss.
Oil prices were supported by tensions surrounding Qatar with some expectations that disruptions to loadings could have a significant impact in undermining shipments and support prices.
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