The oil dip, but the markets remain tense due to disruptions, a record demand

SINGAPORE (Reuters) – US oil prices fell on Thursday after a three-and-a-half-year high due to strong output from Russia, the United States, and Saudi Arabia.

US West Texas Intermediate (WTI) CLc1 futures were $ 72.54 per barrel at 0253 GMT, down 22 cents or 0.3% from their latest settlement. WTI reached its highest level since November 2014 at 73.06 dollars per barrel during the previous session.

Brent LCoC1 crude oil futures were $ 77.54 per barrel, down 8 cents from their last close.

Oil prices rebounded for much of 2018 due to tighter market conditions due to record demand and voluntary supply cuts by the country producer cartel. oil exporters (OPEC).

Unforeseen interruptions of Canada's supply to Libya and Venezuela added to these cuts.

Yet, all the indicators point to an ever tighter market.

Although output growth is slowing, crude production of C-OUT-T-EIA in the United States is approaching 11 million barrels per day (bpd).

With Russia and Saudi Arabia at similar levels, and production is expected to increase as OPEC and Russia relax their supply restrictions, soon three countries will dump 11 million barrels of crude oil every day.

This unprecedented production means that only three countries reach one third of global consumption.

Despite this, badysts warn that the market has little spare capacity to deal with other disruptions.

"With stocks still declining and capacity unnecessarily low, there is not much to avoid any supply disruption caused by increased geopolitical risks," ANZ Bank said. in a report released Thursday.

US INVENTORIES

Despite rising US production, US C-STK-T-EIA crude oil inventories fell by nearly 10 million barrels during the week to 22 June, to 416.64 million barrels, according to the report. Energy Information Administration Wednesday.

Dealers expect stocks to continue to increase in the coming weeks as Syncrude locks in Canada go out of service in over 300,000 b / d of production. The outage should last at least until July, according to operator Suncot (SU.TO).

The draw was also due to high exports of nearly 3 million bpd, combined with a domestic refining activity with a utilization rate of 97.5%, the highest for at least a decade.

Demand for oil has continued its record for most of 2018, but the outlook is worsening in a context of escalating trade disputes between the United States and other major economies, including China and the European Union.

"Our macroeconomic outlook remains extremely bearish," said Marex Spectron, commodities broker.

Shipping broker Eastport said in a note on Thursday that economic growth could be eroded as "growing concerns over trade tensions could reduce investment and spending."