Oil prices dip amid rising US production

Bullish output forecasts by two big US producers outweighed OPEC’s efforts to reduce crude production and withhold around 1.2 million barrels per day (bpd) to hike prices. These forecasts' led to a 0.5 per cent decline in oil prices on Wednesday. U.S West Texas Intermediate (WTI) crude futures were at down 0.7 per cent at US$56.15 per barrel on Tuesday.

Exxon Mobil Corp and Chevron Corp released Permian Basin projections which point to an increase in shale oil production. This would cement these companies as the dominant players in the New Mexico and West Texas field, with potentially one-third of Permian production under their control within five years.

The American Petroleum Institute (API) data also showed US crude stockpiles to be higher than expected.

US crude inventories increased to 7.3 million barrels in the week ended March 1, 2019, to 451.5 million much higher than analyst expectations of crude oil inventories increase of 3,88,000 barrels. Crude stocks at the Cushing, Oklahoma, delivery hub increased to 1.1 million barrels.

Brent crude was trading at US$65.51 per barrel on Wednesday.