LONDON – U.S. crude inventories, but reports of a fall in Iranian oil exports helped to limit losses.
crude was down 70 cents a barrel at $80.08 by 1100 GMT. U.S. light crude was 65 cents lower at $71.13.
“Shale oil production continues unabated in the United States,” said Carsten Fritsch, commodities analyst at Commerzbank. “Rising U.S. oil production is one key reason why the global oil market is likely to be amply supplied next year.”
Oil production from seven major U.S. shale basins is expected to rise by 98,000 barrels per day (bpd) in November to a record of 7.71 million bpd, the U.S. Energy Information Administration (EIA) said.
The largest change is forecast in the Permian Basin of Texas and New Mexico, where output is expected to climb by 53,000 bpd to a new peak of 3.55 million bpd.
U.S. oil production has increased steadily over the last five years, reaching a record high of 11.2 million bpd in the week to Oct. 5. But infrastructure has not kept pace with rising output, filling domestic tanks.
“Once pipelines and oil terminals are built connecting the Permian to the U.S. Gulf Coast, then there will be a big step up in U.S. crude oil exports,” Harry Tchilinguirian, oil strategist at French bank BNP Paribas told Reuters Global Oil Forum.
U.S. crude stockpiles are expected to have risen last week for the fourth straight week, by about 1.1 million barrels, according to a Reuters poll ahead of reports from the American Petroleum Institute (API) and the U.S. Department of Energy’s Energy Information Administration (EIA).
API data are due at 4:30 p.m. EDT (2030 GMT) with the EIA at 10:30 a.m. EDT (1430 GMT) on Wednesday.
Balancing the U.S. data were reports that Iranian exports of crude oil may be falling faster than expected ahead of new U.S. sanctions on Tehran from Nov. 4.
In the first two weeks of October, Iran exported close to 1.5 million bpd of crude to countries including India, China and Turkey, some industry sources suggest.
That is a sharp drop from 2.5 million bpd in April before U.S. President Donald Trump withdrew from a nuclear deal with Iran in May and ordered the re-imposition of sanctions.
With the world’s only sizable spare oil output capacity, Saudi Arabia is expected to export more to offset the loss of Iranian oil supply from the sanctions.
Tension over the disappearance of a Saudi Arabian journalist Jamal Khashoggi in Turkey also remain.
Saudi Arabia has denied it was responsible for the disappearance of Khashoggi. – Reuters