TOKYO (July 19): Oil prices dropped on Thursday after official data showed an unexpected rise in U.S. crude stockpiles and as U.S. output scaled record levels.
Brent crude futures had fallen 21 cents, or 0.3 percent, to $72.69 a barrel by 0615 GMT. West Texas Intermediate (WTI) crude futures declined 7 cents, or 0.1 percent, to $68.69.
The U.S. Energy Information Administration on Wednesday reported that U.S. crude oil production reached 11 million barrels per day (bpd) for the first time. The country has added nearly 1 million bpd in production since November, thanks to rapid increases in shale drilling.
More is likely to come to market before long, Rystad Energy said.
“We are still bullish on U.S. shale, though we expect to see a temporary plateau in 2019 due to the bottlenecks of pipelines and, indeed, manpower and drivers,” said Yosuke Uehara, vice-president at Rystad Energy in Japan.
A sharp jump in U.S. crude oil inventories also added to the bearish tone in the market.
U.S. crude stocks rose by 5.8 million barrels last week, compared with a forecast of a decline of 3.6 million barrels.
Although both crude benchmarks had climbed 1 percent on Wednesday, with other EIA data showing U.S. gasoline stockpiles fell along with supplies of distillate fuels.
U.S. gasoline inventories dropped by 3.2 million barrels last week, while distillate stockpiles, which include diesel and heating oil, declined by 371,000 barrels, the EIA said.
A Reuters poll taken before the data release had forecast that gasoline stocks would be unchanged and distillate stockpiles would show a build of around 900,000 barrels.
Meanwhile, OPEC and non-OPEC’s compliance with oil output curbs declined to around 120 percent in June from 147 percent in May, two sources familiar with the matter told Reuters on Wednesday.