Investing.com - Oil prices were mostly flat Friday morning in Asia, rising only marginally as surging U.S. crude output continues to put a lid on prices.
Crude Oil WTI Futures for April delivery were trading at $60.95 a barrel in Asia at 10:30pm ET, down 0.07%. Brent crude futures for May delivery, traded in London, were up 0.08% at $63.88 per barrel at 11:00am Hong Kong time.
Oil prices have moved quite far from the highs of the beginning of February. WTI started February at $65.80 and Brent started at $69.65.
The Organisation of the Petroleum Exporting Countries (OPEC) has been reducing output by around 1.2 million barrels per day (bpd) since January 2017 in an attempt to ease the global oversupply and stabilize oil markets. Oil output from OPEC fell to a 10-month low in February, but continued increase in oil production in the U.S. has countered OPEC efforts.
U.S. crude inventories increased by 3 million barrels last week, surpassing analyst expectations for a build of 2.1 million barrels, according to the Energy Information Administration (EIA). Gasoline stocks also rose by 2.5 million barrels compared with expectations for a 190,000-barrel drop.
Since mid-2016, U.S production has increased more than 20%, exceeding 10 million bpd. At this rate of increase, the U.S. is set to overtake Russia as the world’s largest oil producer by 2019.
Soaring oil production in the U.S. has simply filled the gap in supply created by OPEC, putting a lid on prices.
Although stocks at the key oil storage facility in Cushing, Oklahoma, has dropped below 30 million barrels for the first time since late 2014, the overall increase in U.S. oil stocks has overshadowed the effects of the destocking at Cushing.
Despite the lid on oil prices, oil markets remain well supported by soaring demand from Asia, particularly China.