Oil drops as US output reaches record, but global markets remain tense

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices dipped on Thursday after data showed record US crude oil production, which led to an increase in inventories.

Outside the United States, however, oil markets remained tense as all exemptions from US sanctions against Iran expired, the political crisis in Venezuela intensified, and the producers' club, the United States. OPEC, maintained supply restrictions.

The international benchmark for oil prices, the Brent spot, stood at 72.09 dollars per barrel at 00:32 GMT, down 9 cents or 0.1% from their last fence.

Futures on US crude WTI (West Texas Intermediate) fell 2 cents to $ 63.58 a barrel, after declining 0.5% in the previous session.

"Crude oil prices have fallen sharply while stocks in the US have reached their highest level since 2017," ANZ Bank said Thursday.

"This comes as US refineries come closer to the spring maintenance period, fueling fears that demand for crude oil will be soft and inventories will continue to rise," the statement said.

US crude stocks reached their highest level since September 2017, rising 9.9 million barrels to 470.6 barrels, while production reached a record 12.3 million barrels per day (bpd ), while refining activity rates have dropped, the Energy Information Administration (EIA) said Wednesday.

(For a chart on "Oil Production and US Inventory Levels", click https://tmsnrt.rs/2WksBC7)

Outside the United States, however, oil markets remained tense despite the political crisis in Venezuela, with stiffer US sanctions against Iran, which no longer allow exemptions to May, and the Organization of Petroleum Exporting Countries (OPEC) continues to restrict supplies. support prices.

Oman's energy minister, Mohammed bin Hamad al-Rumhy, said on Wednesday that OPEC's goal was to extend the cuts, which had been started in January when their next meeting in June.

For producers, difficult market conditions mean higher profits.

Bernstein Energy's badysts said current price levels reflect the average marginal cost of most publicly traded oil producers.

"We surveyed the 50 largest publicly traded oil and gas companies in the world … Based on the 2018 annual reports, we estimate that the global marginal cost of oil has remained stable at $ 71 per barrel", Bernstein said in a note on Thursday.

"This equates to current spot prices, but higher than the price of long-term stripping oil at $ 61 a barrel," the note says.

"As oil prices have risen more than costs, industry margins have increased by more than 200% in 2018," said Bernstein.

(Report by Henning Gloystein, edited by Richard Pullin)