Global crude oil prices fall on relentless rise in US crude output

Global crude oil prices fall on relentless rise in US crude output

Should the cuts be eased, as suggested by Iranian oil minister Bijan Zanganeh to the Wall Street Journal over the weekend, that would curb the profitability for shale producers, lowering shale output.

On the production front and according to Baker Hughes, the USA rig count - an early indicator of future crude oil production - fell 4 to 796 in the week to last Friday, the first fall in seven weeks.

Brent Sweet Crude was at $65.70 per barrel, up 21 cents, or 0.3 per cent, from their previous close. The contract on Friday jumped over 3% to settle at $62.04 a barrel on the New York Mercantile Exchange, turning what would've been a weekly loss into a climb of roughly 1.3% from the week-ago settlement.

The Brent futures were also slumping in the market, trading at $64.85 per barrel, down a total of 10 cents or a solid 0.2% decline. Only Russia pumps more, at almost 11 million bpd.

The EIA is due to publish its latest weekly U.S. production data on Wednesday.

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Crude production from seven major USA shale plays is expected to see a climb of 131,000 barrels a day in April to 6.954 million barrels a day, according to a monthly report from the Energy Information Administration released Monday (

Healthy demand and ongoing supply restraint by a group or producers led by the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation, however, are preventing further price falls.

In oil markets, USA energy companies last week cut oil rigs for the first time in nearly two months, with drillers cutting back four rigs, to 796, Baker Hughes (GE.N) energy services firm said.

While US news has been dominated by the aluminum and steel tariffs proposed by President Donald Trump, the oil markets will not sustain significant price reactions, Poulsen said.

The split is driven by differing views over whether $70 a barrel would send USA shale companies into a production frenzy that could cause prices to crash. The most bullish scenario will be a weaker U.S. Dollar and higher equity prices. "Rising production and inventory in the United States has been reducing fund sentiment since it peaked at the end of January", ING said in a note. The silver and copper fell by 0.19% and 0.42% respectively.

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