Oil prices were stable on Wednesday after posting two days of declines at the start of the week, with support largely coming from strong China data that implies higher future imports, while the relentless rise in U.S. crude output capped gains.
U.S. West Texas Intermediate (WTI) crude futures were at $60.77 a barrel at 0753 GMT, up 6 cents, or 0.1 percent, from their previous settlement.
Brent crude futures were at $64.62 per barrel, down just 2 cents from their last close.
Wednesday’s tepid support came from China, which reported January-February domestic oil production down by 1.9 percent on the year to 30.37 million tonnes, equivalent to 3.77 million bpd. At the same time, crude throughput rose 7.3 percent to 93.4 million tonnes, implying a need for more imports.
Despite this, Brent and WTI have shed around 1.5 and 2.4 percent respectively since the start of the week, with prices hit by concern over a relentless rise in U.S. crude oil production that has also been contributing to increasing inventories.
U.S. crude production has soared by almost a quarter since mid-2016 to 10.37 million barrels per day (bpd), overtaking output by top exporter Saudi Arabia.
U.S. production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russia, according to the International Energy Agency (IEA).
Rising output, as well as seasonally low demand, mean that U.S. crude inventories rose by 1.2 million barrels in the week to March 9, to 428 million barrels, the American Petroleum Institute said on Tuesday.
As a result, crude prices have not returned to their January highs of over $70 per barrel for Brent and almost $67 for WTI.
U.S. bank Goldman Sachs said in a note that there was a “potentially large increase in (U.S.) drilling activity in coming weeks”.
Weekly U.S. crude production figures will be published by the Energy Information Administration (EIA) later on Wednesday.
The increases in U.S. production has this year exceeded supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), which have been in place since 2017 in an effort by the cartel, and supported by non-OPEC member Russia, to prop up prices.
Estimates by the EIA show global supplies will exceed 100 million bpd for the first time in the second quarter of 2018, while demand will only break through that level in the third quarter, implying a slightly oversupplied market.
That would be a reversal from a supply deficit in 2017 and early 2018.
Rating agency Moody’s said it expected oil prices to “remain range-bound through 2019” in a price band of $45 to $65 per barrel.
