Crude Prices Slip to $66 Per Barrel

Oil slipped to $66 a barrel on Friday, under pressure from concerns that rising US oil output and exports will offset OPEC-led attempts to erode stockpiles with output curbs.

US oil production last week was 10.27 million barrels per day, a record level if confirmed by monthly figures. Crude exports jumped to more than 2 million bpd, close to a record high of 2.1 million hit in October, CNBC reported.

“The US is pumping out a record amount of oil,” said Naeem Aslam, chief market analyst at Think Markets UK Ltd.

“The bull rally, which we have seen for the black gold, could fade away as the US oil production undermines the OPEC production cut commitments,” he said.

Brent crude, the global benchmark, was down 34 cents at $66.05. Prices had rallied in early 2018 and reached $71.28 on Jan. 25, the highest since December 2014.

US crude fell 27 cents to $62.50.

Oil also slipped as the US dollar strengthened. A stronger dollar can make oil and other commodities denominated in the US currency more expensive for other currency holders.

The latest decline for crude came despite the US Energy Information Administration reporting on Wednesday that crude stocks fell unexpectedly by 1.6 million barrels. Analysts said low import figures contributed to the decline.

The Organization of Petroleum Exporting Countries is not outwardly worried by the rise in US output and said it is comfortable at the speed the market is moving toward balance.

“I think the pace is excellent, the deal is working and we are very happy with it,” UAE Energy Minister Suhail al-Mazroui, the current OPEC president, told Reuters on Wednesday. “But the job is not yet complete.”

In January 2017, OPEC and allies, including Russia, began to cut production by about 1.8 million bpd, almost 2% of global supply, to get rid of a glut that had built up since 2014 and that led to a price collapse.

OPEC wants to reduce oil inventories held by industrialized nations to their five-year average and is getting closer to that goal, although officials are starting to talk about looking at different metrics.