Oil is down to $66 per barrel today, pushed down by worries that gaining US oil production and exports will neutralize the effect of OPEC-led output cuts aimed at lowering stockpiles.
Oil production in the US stood at 10.27 mln barrels a day in the past week, an unprecedented volume if monthly report confirms it. Exports exceeded 2 million barrels daily, very near the highest figure of 2.1 mln reached last October.
The upward trend for oil prices that has taken place lately could reverse as the US crude production derails the OPEC’s production limitations accord, said Naeem Aslam of Think Markets UK Ltd. Brent moved down 45 cents to $65.94, while US WTI lost 34 cents, falling to $62.43.
Growth of the US dollar also caused oil prices to decrease. A higher dollar could be harmful for other countries using their currencies as oil is dependent on it.
US output is likely to go up further this year and hit 11 mln barrels a day at the end of 2018, which could thwart OPEC’s attempts to minimize stockpiles. However, OPEC shows no signs of concern and says it is satisfied with the speed the market is seeking balance.