Oil down with surprise increase in US crude production

Crude prices were down on Thursday with a surprise increase in US crude oil production, inciting fears of an increase in the global oil supply glut.

International benchmark Brent crude was trading at $39.92 per barrel at 0650 GMT for a 0.97% decline after closing Thursday at $40.31 a barrel with a daily loss of 5.44%.

American benchmark West Texas Intermediate (WTI) was at $37.62 a barrel at the same time for a 1.02% loss after ending the previous day at $38.01 per barrel with a daily decline of 5.85%.

US crude oil production increased by 501,000 barrels per day (bpd) to approximately 11 million bpd for the week ending June 19, according to data released by the country's Energy Information Administration (EIA) on Wednesday.

This marked the first weekly increase in US crude oil output since the week ending March 13, the EIA data showed. Crude oil production in the US declined for 1 consecutive weeks since then, as the novel coronavirus (COVID-19) has taken a major toll on global oil demand and pushed prices in April to their lowest levels since 1999.

Risks of a second wave of COVID-19 continue to keep global oil demand low and create downward pressure on crude prices.

On top of that, rising oil supply from the US, the world's largest crude producer, is again arousing fears that the global oil oversupply will be difficult to trim in the second half of 2020.

Contact Us