Oil prices were mostly flat Thursday morning in Asia, rising and dipping only marginally amid larger-than-expected U.S. crude build-up.
Crude Oil WTI Futures for April delivery were trading at $61.70 a barrel in Asia at 04:04 am GMT, up 0.10%. Brent crude futures for May delivery, traded in London, were down 0.05% at $64.70 per barrel.
U.S. crude inventories increased by 3 million barrels last week, surpassing analyst expectations for a build of 2.1 million barrels, according to weekly data by the Energy Information Administration (EIA). Gasoline stocks also rose by 2.5 million barrels compared with expectations for a 190,000-barrel drop.
Oil output from the Organization of the Petroleum Exporting Countries (OPEC) fell to a 10-month low in February, but soaring oil production in the U.S. has simply filled the gap in supply created by OPEC, putting a lid on prices.
OPEC has been reducing output by around 1.2 million barrels per day (bpd) since January 2017, and the pact will run until the end of 2018. The continued increase in oil production in the U.S. has, however, hampered OPEC attempts to ease the global oversupply.
Earlier this week, International Energy Agency Executive Director Fatih Birol said that the U.S. will overtake Russia as the world’s largest oil producer by 2019. U.S production has surpassed 10 million bpd, an increase of more than 20% since mid-2016.
Meanwhile, the U.S. currency is gaining strength, further putting downward pressure on oil prices, as dollar-denominated oil is now more expensive for other countries to import.
Oil markets remain well supported by strong global fundamentals. Demand continues to surge in Asia, particularly China, which emerged as a top buyer of U.S. crude last year.
However, prices for the beginning of March have moved quite far from the highs of the beginning of February. WTI started February at $65.80 and Brent started at $69.65.
