Crude oil prices still under pressure amid concerns over United States production levels

Mar 04, 2018, 03:55

Oil prices were pressured lower along with the equity market in the morning session on Friday after U.S. President Donald Trump announced steep tariffs on steel and aluminum imports. The price for Brent crude oil, the global benchmark, was up 0.18 percent as of 9:17 a.m. EST to $66.64 per barrel.

It noted the impact of growth of American production, saying, "Increasing U.S. production, driven by growth in the shale oil sector, has put a limit on price increases".

Crude oil prices slipped into negative territory during the previous session on anticipation of swelling USA crude oil inventories.

The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russian Federation have agreed to cap output by about 1.8 million bpd in a deal running from January a year ago until the end of 2018.

US crude inventories have fallen more than 100 million barrels in 12 months to their lowest in three years.

United States crude output slipped in the last month of 2017, but in November hit an all-time high of 10.057 million barrels per day (bpd).

OPEC officials are expected to meet US shale executives next week in Houston, at the annual CERAWeek conference, presented by IHS Markit.

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A stronger dollar also dented oil prices.

"One of the things that contributed to the strength of the (oil) market was the weakness of the U.S. dollar over the past couple months", said Gene McGillian, manager of market research at Tradition Energy in Stamford.

The (), which measures the greenback against six major currencies, increased for a second day on Wednesday and was slightly higher on Thursday.

Fawad said the market has been ignoring "good compliance with the production cuts by OPEC and non-OPEC countries".

"The standoff "shale versus sheikh" continues to frame the oil market, with the former again gaining the upper hand", said Norbert Ruecker, head of macro and commodity research at Julius Baer.

The OPEC/non-OPEC cuts totaling roughly 1.8 MMBPD, which began in January 2017, have helped raise prices from lows around $26/Bbl in January 2016.

Venezuela's output dropped by 30,000 barrels a day to 1.68 million barrels.