Crude oil futures were stable to lower during mid-morning trade in Asia Wednesday after the Energy Information Administration forecast a rise in US unconventional oil production in March. Expectations of a build in weekly US crude stocks data also capped prices, analysts said. At 10:28 am Singapore time (0228 GMT), ICE April Brent crude futures were down 8 cents/b (0.12%) from Tuesday’s settle at $66.37/b, while the NYMEX March light sweet crude contract was down 6 cents/b (0.11%) at $56.03/b.
Analysts surveyed by S&P Global Platts Tuesday were expecting a 3.5 million-barrel build in US crude stocks for the reporting week ended February 15 and a 1.5 percentage point rise in US refinery utilization rates to 87.4% of capacity. Platts Analytics expects the data on US crude exports to show an increase to 2.5 million b/d last week, up from the EIA-pegged 2.36 million b/d forecast for the week. American Petroleum Institute weekly data is due for release later Wednesday and more definitive EIA data on Thursday.
“Crude oil retreated from this year’s high on renewed concerns of economic growth if the [US-China] trade deal does not materialize,” ANZ wrote in a note Wednesday. US unconventional oil production is predicted to cross the 4 million b/d mark from the Permian Basin in West Texas and New Mexico for the first time next month, the US Energy Information Administration said Tuesday. Also in March, total US unconventional oil production growth should rise 84,000 b/d month on month for a total just shy of 8.4 million b/d, the EIA said in its monthly Drilling Productivity Report.
Permian oil production should weigh in averaging 4.024 million b/d in March, up 43,000 b/d on the month. That is more than the 23,000 b/d of oil output growth predicted for February, Platts reported.