- The Writer holds an MSc from Creighton University and is a Ph.D. candidate in the Turkish National Police Academy
Brent oil price continued to hover around $65 on the back of the increase in U.S. oil production and commercial inventories and with a halt in the decline of the U.S. dollar index.
As the EIA revised up the forecast for U.S. supply growth for 2018 and 2019, the possibility of removing the surplus in global oil inventories decreased causing oil prices to remain below $65.
The oil rig count in the U.S. has waned and could prop up oil prices up.
Last week’s oil markets will be reviewed based on the U.S. dollar index, weekly American Petroleum Institute (API) and Energy Information Administration (EIA) oil inventories, weekly EIA crude oil production in the U.S. and weekly U.S. Baker Hughes rig count.
Brent oil began the week with a rise to $65.54 through a slowdown in the U.S. oil rig count during the previous week.
On Tuesday, it continued its ascent to $65.79 through a fall in the U.S dollar index.
However, it plunged to $64.34 due to the weekly rise of 2.40 million barrels in U.S. commercial oil inventories, according to the EIA’s weekly report on Wednesday as well as a rise in U.S. crude oil production by 86 thousand barrels per day to 10.369 million barrels per day from the previous week ending Mar. 02.
It further dropped to $63.61 due to a stronger dollar on Thursday.
However, it recovered its losses and settled at $65.49 at the end of the week with a decline in the U.S. dollar index and a drop of four in the oil rig count, according to Baker Hughes data.
OPEC and non-OPEC participating countries have been working to remove the surplus in global oil inventories, however, supply growth in the U.S. continues to increase and outweigh their efforts. The EIA released its Short-Term Energy Outlook on March 6 revealing important forecasts for U.S. oil supply growth.
According to the EIA, U.S. crude oil production was around 9.3 million barrels per day in 2017, but production for 2018 is forecast at around 10.7 million barrels per day and is expected to reach about 11.3 million barrels per day in 2019.
U.S. shale oil production is the driver for such predictions. According to the EIA’s monthly productivity report released on March 12, U.S. shale oil output will be 6.82 million barrels per day for March 2018 and 6.95 million barrels per day for April 2018.
Brent oil will veer around $65 this week depending on a recovery in the U.S. dollar index. For price increase beyond this, more declines in U.S. oil crude production and commercial oil inventories are needed.
- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.