Oil prices eased on Thursday, taking Brent crude to a 2018 low, as soaring U.S. output undermined OPEC’s efforts to tighten markets and prop up prices.
Brent crude futures LCOc1 were at $65.20 per barrel, down 31 cents, or 0.5 percent, from the previous close. Brent slipped to its lowest for the year at $65.12 a barrel early in the session.
U.S. West Texas Intermediate (WTI) crude was at $61.58 a barrel. That was down 23 cents, or 0.2 percent, from the last settlement, though still some way off its $60.10 2018 low on Jan. 2.
“Brent has now turned negative for 2018 while WTI isn’t looking great either,” said a market analyst.
The dips follow bigger falls on Wednesday, when crude touched one-month lows and erased much of 2018’s early gains.
Some support on Thursday came from the second outage in as many months on the 450,000 barrels per day Forties pipeline network – Britain’s biggest – which supplies much of the crude underpinning Brent futures.
But the biggest market driver was U.S. production. What’s long been expected is now official: U.S. crude oil output averaged above 10 million barrels per day (bpd) for the first time since the early 1970s last week, reaching 10.25 million bpd. U.S. output is now higher than the previous 10.044 million bpd record from back in 1970.
It’s above that of top exporter Saudi Arabia’s and within reach of Russia‘s output. Weighing further on prices, U.S. commercial crude stocks C-STK-T-EIA rose by 1.9 million barrels in the week to Feb. 2, to 420.25 million barrels.
The U.S. Energy Information Administration (EIA), this week, upped its 2018 average output forecast to 10.59 million bpd, up by a whopping 320,000 bpd from its last forecast just a week earlier.