Oil has extended its slump below $50 a barrel as concerns grow that rising U.S. supplies will offset the production curbs by the Organization of Petroleum Exporting Countries and allies including Russia. Output at major American shale fields will reach a record in July, according to the EIA.
West Texas Intermediate for July delivery slid $1.73 to settle at $44.73 a barrel on the New York Mercantile Exchange, the lowest close since Nov. 14. Total volume traded was about 71 percent above the 100-day average.
The U.S., Brazil, Canada and other producers outside OPEC will increase output next year by the most in four years, the IEA said in its first forecast for 2018. As a result, the need for crude from OPEC won’t be high enough for the group to reverse cuts that it’s currently making to drain a global glut.
U.S. crude oil production averaged an estimated 8.9 million b/d in 2016. EIA forecasts U.S. crude oil production to average 9.3 million b/d in 2017 and 10.0 million b/d in 2018. The 2018 forecast exceeds the previous record level of 9.6 million b/d set in 1970.
* Iraq is driving up crude oil exports to the U.S., the world’s second-biggest import market, just as there are signs Saudi Arabia is honoring a pledge to restrict such deliveries, according to tanker-tracking data.
* China’s crude output in May fell 1.8 percent from the previous month to average 3.84 million barrels a day, the lowest since October, according to Bloomberg calculations based on data Wednesday from the National Bureau of Statistics.