Oil Falls on Growing U.S. Output Forecasts
By David Hodari
Oil prices slipped Wednesday, pressured by forecasts of rising U.S. production this year.
Brent crude, the global oil benchmark, was down 0.62% at $65.38 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were down 0.67% at $62.18 a barrel.
"You've got bearish fundamentals, with the U.S. [Energy Information Administration] increasing its prognosis for U.S. production," said Bjarne Schieldrop, chief commodities analyst at SEB Markets.
The EIA raised its production estimate for 2018 again late Tuesday and now expects U.S. crude oil production to climb by 1.4 million barrels a day.
That came after the International Energy Agency lifted its forecasts for U.S. oil production Monday.
"While the market was able to absorb [the IEA's forecast]... it was not able to do the same with yesterday evening's predictions," analysts at Commerzbank said in a note.
Investors also focused on the American Petroleum Institute's weekly report on oil inventories, released Tuesday.
The API's Weekly Statistical Bulletin revealed a 5.7 million barrel increase in U.S. crude stocks and strengthened the bearish view of the market, Mr. Schieldrop said.
From a fundamental viewpoint, market participants remained torn between growing U.S. inventories and the continued efforts of the Organization of the Petroleum Exporting Countries and other major producers like Russia to cut output.
With U.S. production now on course to hit 11 million barrels a day in October, a month earlier than previously expected, the country would become the world's largest crude producer in the fourth quarter, Commerzbank analysts said.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract --eased 0.09% to $1.93 a gallon. ICE gas oil changed hands at $575.00 a metric ton, up 0.22% from the previous settlement.
Write to David Hodari at David.Hodari@dowjones.com
Corrections & Amplifications
This article was corrected at 1325 GMT because the original misstated the name of the agency in the fifth paragraph. It is called the International Energy Agency, not the International Energy Administration.
(END) Dow Jones Newswires
March 07, 2018 07:01 ET (12:01 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.