Oil prices set to slip over the week: pressure from rising U.S. output

Global Stock Markets

Oil prices were broadly steady on Thursday but still set to slip over the week for the second time in a row against a backdrop of rising U.S. crude production and an increase in inventories. 

Brent crude futures LCOc1 were down 3 cents at $64.31 per barrel by 1005 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 3 cents at $61.18 a barrel.

Brent was on track for a drop of around 0.1 percent this week, after last week’s 4.4 percent slide.

A build in U.S. crude inventory reported the previous day was not as large as expected, given that stocks tend to rise towards the end of the winter as refineries conduct maintenance.

But with the threat of the United States sparking a trade war with some of its largest partners, financial markets were on edge. Prices of commodities stayed under pressure. 

China reported a steep monthly drop in crude imports in February, when the Lunar New Year holidays took place. Imports of crude dropped by more than 20 percent to a daily rate of 8.2 million barrels per day (bpd) from 9.4 million bpd in January.

Iimports in January and February combined gave a daily rate of about 9.02 million bpd, up 10.8 percent from the same period last year. [RUSSELL/]

Rising U.S. production, which reached 10.37 million bpd last week, remains a focus for investors.

U.S. output is expected to surge beyond 11 million bpd by late 2018, which would surpass the current No. 1 producer Russia.

This U.S. increase is putting pressure on the Organization of the Petroleum Exporting Countries, Russia and other nations which have been curbing output to prop up prices but risk losing market share.