US crude oil stockpiles fell more than expected last week, while gasoline and distillate inventories posted surprise builds as refiners ramped up their activity to the highest since January ahead of Memorial Day weekend, the Energy Information Administration said on Thursday. The Bloomberg Dollar Spot Index rose 0.2 per cent.
Global benchmark Brent fell 77 cents to US$76.79 a barrel.
And it's not just a front-month aberration, with WTI's discount to Brent for crude for delivery in six months at $10.71 a barrel on June 1, the most since September 2014.
Kazakhstan's oil output, however, continued rising.
Saudi Arabia's energy minister Khalid al-Falih met with his counterparts Bakheet al-Rashidi from Kuwait, Suhail al-Mazrouei from the UAE, along with Mohammed al-Rumhy, oil and gas minister from non-OPEC producer Oman, according to a statement released by Kuwait's Kuna news agency on Sunday. It also estimated that OECD crude oil inventories had fallen 20 million barrels below the five-year average for the first time since the output cuts began. Most other producers weren't consulted about the proposal and oil prices fell after the news.
This pushed Brent to a three-week low below $75 a barrel on Monday. Though the Vienna agreement yielded its intended effect, the latest OPEC and non-OPEC producing countries' meeting in November 2017 agreed to extend oil output curbs until the end of 2018. We agreed that there will be a certain oil output volume and quota if it does not harm global investors.
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USA crude production rose to 10.77 million barrels a day, the highest in weekly data going back to 1983, the Energy Information Administration said Thursday.
The price of WTI crude free-on-board at Houston, as assessed by Argus Media, was $73.71 a barrel on June 1, a premium of $7.90 a barrel, or 12 percent, to WTI futures on the New York Mercantile Exchange.
In addition, Russian Federation agreed to reduce its crude oil production.
The second-largest fall in May came from Venezuela, whose production declined to 1.45 million bpd from 1.50 million bpd, compared to the implied target of 1.972 million bpd, which means that Venezuela's involuntary "cut" in May was 617,000 bpd-more than the cut pledged and achieved by OPEC's biggest producer Saudi Arabia.
West Texas Intermediate futures are down 2.1 per cent this week as pipeline bottlenecks in the Permian Basin add to pressure from unprecedented levels of US production.
U.S. natural gas production in the lower 48 states rose to an all-time high of 88.8 billion cubic feet per day (bcfd) in March, up from the prior record of 87.7 bcfd in February, according to EIA's production report.