Oil prices rise on Middle East tension, but soaring U.S. output caps gains
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $62.31 a barrel at 01.28 GMT, up 25 cents, or 0.4 percent, from their previous close.
Worries about Venezuela’s tumbling crude production also supported oil markets.
The International Energy Agency said last week that Venezuela, where an economic crisis has cut oil production by almost half since early 2005 to well below 2 million bpd PRODN-VE, was “clearly vulnerable to an accelerated decline”, and that such a disruption could tip global markets into deficit.
Falls on global share markets helped cap gains. Markets are under pressure from concerns over a possible trade war between the United States and other major economies, as well as from fears of stiffer regulation as Facebook came under fire following reports it allowed improper access to user data.
Also looming over oil markets has been surging U.S. crude oil production C-OUT-T-EIA, which has risen by more than a fifth since mid-2016, to 10.38 million barrels per day (bpd), pushing it past top exporter Saudi Arabia.
Only Russia produces more, at around 11 million bpd, although U.S. output is expected to overtake Russia’s later this year as well.
Many analysts expect global oil markets to flip from slight undersupply in 2017 and early this year into oversupply later in 2018.