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Crude Edges Up on Asian Stock Markets Gains
Crude Edges Up on Asian Stock Markets Gains

Crude Edges Up on Asian Stock Markets Gains

Crude Edges Up on Asian Stock Markets Gains

Crude oil futures rose on Friday, as Asian stock markets gained.
Brent crude futures were at $63.79 per barrel, up 18 cents, or 0.3%, from their previous close. US West Texas Intermediate crude futures were at $60.24 a barrel, up 12 cents, or 0.2%, CNBC reported.
Despite these increases, Brent and WTI are on course for weekly declines of almost 1% and 1.6 %, respectively.
Traders said the weakness is due to soaring output from the United States, which has risen by 23% since the middle of 2016, to 10.37 million barrels per day.
“The market continues to struggle to shake off an excess supply... boosted by increased supply from a growing US shale patch,” ANZ Bank said on Friday.
Thanks largely to shale drilling, the United States now produces more crude than top exporter Saudi Arabia. Only Russia pumps more, at almost 11 million bpd.
“It seems only a matter of time before the US becomes the biggest oil producer in the world. The main question which keeps investors busy is when exactly this will be reached,” Hans van Cleef, senior energy economist at Dutch bank ABN Amro, said in a note to investors.
Unlike Middle East producers, where output is largely dictated by state-owned oil companies, US producers drill and sell purely based on economics.
If prices remain at current levels or rise further, US drillers are profitable and will raise output; if prices stumble, US production will fall.
“The correlation between the US oil production and the oil prices will remain considerable,” van Cleef said.
As much as production, oil prices will also depend on demand. However, there are signs of a slowdown, although much of this could be seasonal as the Northern Hemisphere winter ends.

 

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