Global price of oil falls

Global price of oil falls

U.S. West Texas Intermediate (WTI) crude futures were at $66.78 a barrel, down $1.1, or 1.6 per cent.

US production continues to grow and exports are also set for a further increase: June shipments are projected to hit 2.3 million bpd, of which 1.3 million bpd will go to Asian buyers.

"Tight (shale) oil's been eating OPEC's lunch for the last few years".

United States oil production has surged by more than 27% in the last two years to 10.73 million bpd.

Al-Falih said that OPEC as well as Russian Federation could supply more oil to markets around the world in the short term and make up for the output collapse in Venezuela, and the impact of sanctions by the USA against Iran.

Record U.S. crude shipments to Asia are expected in the coming months, with a senior executive at a U.S. oil company estimating that the country will ship some 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia. State oil company PTT PCL is 1 million barrels of WTI Midland, while Thai Oil and Esso Thailand bought at least 500,000 barrels of Bakken crude each, said traders with knowledge of the country's crude deals.

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USA oil production C-OUT-T-EIA has surged by more than 27 percent in the past two years to 10.73 million bpd. However, an oil expert said these are short-term blips and there are plenty of options for oil producers to ease price hikes.

Next month's meeting of the Organization of the Petroleum Exporting Countries (OPEC) is being touted as key to the outlook for crude oil prices, but a strong indication of what's likely will come next week.

The rapid decline in oil inventories and worries about supplies after the US decision to withdraw from the worldwide nuclear deal with Iran, as well as Venezuela's collapsing output, were behind the change in OPEC's thinking.

Also weighing on crude oil, driller Baker Hughes reported on Friday that U.S. oil rig count went up by 15 oil rigs during last week.

"The market is now pricing in the possibility that OPEC is going to raise production", Phil Flynn, an analyst at Price Futures Group in Chicago, said by phone. Without compensating supply from other members, this number looks likely to expand as the USA reimposes sanctions on Iran and the collapse of Venezuela's oil industry worsens.

The creation of strategic petroleum reserve (SPR) is founded on several joint worldwide studies, the DoE's Oil Industry Management Bureau said. US production broke 10 million bpd for the first time in 48 years in November. The U.S.is due to reimpose economic sanctions on Iran after recently deciding to withdraw from its nuclear pact with Tehran.

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