Crude prices keep declining

Khalid Al-Falih, Saudi Arabia’s energy minister.

“Supply looks quite healthy and that’s taking the edge off oil prices“, said Nitesh Shah, a commodities analyst at ETF Securities in London.

But the biggest market driver was USA production. The production gain would be 1.26 mmbd over 2017, if realized. Crude in the nation’s storage tanks and terminals increased by 1.9 million barrels, while gasoline and distillate stockpiles also expanded, the data showed.

Domestic crude oil production in 2018 is also expected to rise by more than previously projected, the agency said in its monthly short-term energy outlook. New refinery capacity and strategic inventory stockpiling combined with declining domestic oil production were the major factors contributing to the recent increase in China’s crude oil imports. While crude supplies did rise by 1.9 million barrels according to the EIA, they fell at the Cushing Oklahoma delivery point by 711,000 barrels. US refineries produced about 10.1 million barrels of gasoline a day last week, up by about 500,000 barrels a day compared to the prior week. Prices are down 4.8 percent for the week.

The U.S. Energy Information Administration reported total January crude oil production averaged 10.2 million barrels of oil per day, an increase of 100,000 barrels per day from December.

The level of American oil production has 40 years of records.

But this isn’t the first time the unlikely scenario of America selling oil to the oil-rich Middle East has happened – it also occurred a few months earlier when the U.S. sold oil to Abu Dhabi. China’s crude oil imports from the United States will exceed 10 million tonnes (200,000 bpd) in 2018, according to Sinopec.

In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months, which helped the government’s excise mop-up to more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

Terminal operators and shippers in the U.S. Gulf are ramping up investment to guard against supply bottlenecks as more barrels leave the U.S. It can take 18 to 24 months to build an export dock. West Texas Intermediate, the USA benchmark for the price of oil, was down 0.32 percent to $63.19 per barrel.

Most shipping channels are too shallow.

A year ago investors where lulled into complacency that “this time it is different” and American producers won’t ramp up output, said Olivier Jakob, managing director of Petromatrix.

Industry experts are calling the report bearish.

On Wednesday closely followed investor Leon Cooperman said USA crude could hit $70.