Oil down as US crude oil production sets new record high


Crude oil prices were steady with little change early Friday as China’s data revealed its weakest economic expansion in nearly three decades in 2019, prompting a greater likelihood of lower oil demand this year. International benchmark Brent crude was trading at $64.56 per barrel at 0700 GMT for a 0.17% loss, after ending Thursday at $64.67 a barrel.
American benchmark West Texas Intermediate was at $58.49 a barrel at the same time, also posting a 0.17% decline, after ending the previous session at $58.59 per barrel. The Chinese economy expanded 6.1% in 2019, according to the country’s National Bureau of Statistics figures announced on Friday. This marked the weakest rate of expansion since 1990 in the world’s second largest economy, implying the Sino-American trade war has taken its toll on China.
The slow economic expansion also suggests that overall oil demand in China, the world’s second largest oil consumer, as well as in Asia could remain weak this year, pushing crude prices lower.
Crude oil production in the U.S. reached a new record high of 13 million barrels per day (bpd) as at the week ending Jan. 10, according to data released by the Energy Information Administration (EIA).
The world’s biggest crude oil producer saw its output decrease by 3,000 bpd in the state of Alaska, but increase by 100,000 bpd in other states excluding Hawaii, bringing total crude output in the country from approximately 12.9 million bpd to 13 million bpd. The last time the U.S.’ crude oil production reached a record high level was for the week ending Nov. 22 when output climbed to 12.9 million bpd, according to the EIA’s data, which was released on Wednesday.
Crude oil production in the country is estimated to average 13.3 million bpd in 2020, according to the EIA’s Short-Term Energy Outlook report for January. Commercial crude oil inventories in the U.S. fell by 2.5 million barrels, or 0.6%, to 428.5 million barrels for the week ending Jan. 10, more than the market expectation of a decline of 0.5 million barrels. Crude inventories increased by 1.2 million barrels during the previous week.
Strategic petroleum reserves, which are not included in the commercial crude stocks, remained unchanged at 635 million barrels last week, according to the data.
Gasoline inventories, on the other hand, rose by 6.7 million barrels, or 2.7%, to 258.3 million barrels over that period. The market expectation was an increase of 3.4 million barrels. Gasoline inventories rose by 9.1 million barrels the week before.

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