USA monthly crude oil production sets new record

USA monthly crude oil production sets new record

USA monthly crude oil production sets new record

Saudi Arabia increased output by 150,000 barrels to 10.68 million a day last month, the highest in Bloomberg data going back to 1962, while Iran's production slipped by 10,000 barrels a day to 3.42 million, the lowest since March 2016.

While the USA oil production has certainly increased in recent years, the demand has also been increasing. Natural gas volumes decreased four percent "largely due to a continuing near-term shift in USA unconventional development from dry gas to liquids", ExxonMobil said.

However, OPEC's reserves are more than likely overstated. A Reuters survey forecasts the 15-nation producer group in October pumped at its highest level since 2016.

The mid-1970s were the heyday of the Iranian oil sector, when its output accounted for 10 percent of global production. This is the closest OPEC has moved to 100 percent compliance since the June agreement. The smallest deficit actually came from earlier this month (10/5).

Total production declined two percent from the same quarter past year to 3.8 million barrels per day of oil equivalent, the company reported, but production was higher compared with the April-June period and is expected to increase from current levels, according to the report.

While futures in NY edged higher on Friday on signs of a possible trade deal between the US and China, they're still on course for a 5.7 percent weekly loss.

Clayton Allen of Height Securities said Iran's biggest oil customers, all in Asia, were seeking waivers to US sanctions against Iran's petroleum exports. Now there is talk that other counties like China might ask for a pass as well.

The U.S. Energy Information Administration on Wednesday reported a sixth straight week of builds in U.S. crude inventories. And at 426.0 million barrels we are still just 2% above the five-year average for this time of year.

At the same time, gasoline held in storage fell by 3.2 million barrels and distillate fuel inventories - including diesel and heating fuel - dropped by 4.1 million barrels.

Meanwhile, US Treasury Secretary Steven Mnuchin warned that SWIFT, the global financial transfer system, would be subject to sanctions if it handles transactions with Iranian institutions.

Another factor that weighed on prices over the last few weeks was the great Mexican Hedge.

Crude oil and other commodities are historically an asset class for investors to "get away" from the stock market, Kilduff told CNBC in an interview this week. The document doesn't detail how much crude was hedged.

Oil prices were down in afternoon trading prior to the release of the API data on inventories as traders feared additional inventory increases.

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