By Jessica Resnick-Ault
| NEW YORK
NEW YORK Oil prices fell on Tuesday, hitting their lowest in 11 days as a U.S. government report said shale oil output in May was expected to post the biggest monthly increase in more than two years.At a time when OPEC and other producing nations have been trying to cut output, government drilling data showed U.S. shale production next month was set to rise to 5.19 million barrels per day (bpd). Output from the Permian play, the country's largest shale region, was expected to reach a record 2.36 million bpd.Global benchmark Brent crude futures fell 11 cents, trading at $55.25 a barrel by 11:13 a.m. EDT (1513 GMT). Brent touched $54.76 intraday, its lowest since April 7.U.S. West Texas Intermediate crude futures rose 1 cent to $52.66 a barrel. Their intraday low was $52.14, also the weakest since April 7.The U.S. Energy Information Administration "estimates for a combined 124,000 barrels-per-day growth in U.S. shale production over May have added another bearish element to the market," wrote analysts at JBC Energy, based in Vienna.
More barrels could be on their way to market from U.S. shale fields as financial companies are investing billions in production, a Reuters analysis showed.Members of the Organization of the Petroleum Exporting Countries are cutting oil production by 1.2 million bpd from Jan. 1 for six months, the first reduction in eight years.
"The battle between the 'sheiks and the shale oil producers' is far from decided ... with all attempts by OPEC to achieve a lasting production deficit on the oil market being torpedoed by non-OPEC producers – first and foremost the U.S.," analysts at Commerzbank wrote. The energy minister OPEC member the United Arab Emirates said he saw healthy oil demand growth this year and believed inventories would fall, but it would take more time to rebalance the market.He said "conformity" within OPEC and other producers was improving and that the UAE was complying 100 percent with its pledge to cut production.
OPEC leader Saudi Arabia tightened February crude oil exports to the lowest since mid-2015, official data showed on Tuesday. A preliminary Reuters poll showed analysts expected data to show U.S. crude stocks fell in the week to April 14, building on a surprise decline the previous week.Analysts said they expected the data to show crude inventories fell around 1.5 million barrels last week. (Additional reporting by Aaron Sheldrick in Tokyo and Karolin Schaps in London; Editing by Dale Hudson and David Gregorio)
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Published Date: Apr 18, 2017 21:54 PM | Updated Date: Apr 18, 2017 21:54 PM