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Oil Prices Slump To 5-Week Low Amid Rising U.S. Output

Published 02/08/2018, 03:56 AM
© Reuters.  Oil falls to 5-week lows
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Investing.com - Crude oil futures extended losses on Thursday, as lingering concerns over rising production in the U.S. sent prices to their lowest levels in around five weeks.

U.S. West Texas Intermediate (WTI) crude futures fell 30 cents, or 0.5%, to $61.49 a barrel by 3:55AM ET (0855GMT). The U.S. benchmark sank $1.60, or 2.5%, in the last session, after touching its lowest level since Jan. 5 at $61.25.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., dipped 31 cents, or roughly 0.5%, to $65.20 a barrel, after hitting its lowest level since Dec. 26 earlier in the session.

Oil settled lower for the fourth session in a row on Wednesday, after data showed U.S. oil production topped the 10 million barrels per day (bpd) mark last week.

Domestic oil production, driven by shale extraction, rose 3.3% to an all-time high of 10.25 million bpd, the U.S. Energy Information Administration said. That figure is above that of top exporter Saudi Arabia and within reach of Russia's output levels.

Weighing further on prices was that U.S. commercial crude stocks rose by 1.9 million barrels in the week to Feb. 2, to 420.25 million barrels.

That added to fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies.

The producer group, along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

In other energy trading, gasoline futures held steady at $1.764 a gallon, while heating oil was little changed at $1.925 a gallon.

Natural gas futures ticked up 1.5 cents, or 0.6%, to $2.718 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day amid expectations for a withdrawal of 116 billion cubic feet.

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