Venezuelan oil tankers. Picture: BLOOMBERG
Venezuelan oil tankers. Picture: BLOOMBERG

Singapore — Oil prices fell on Friday after the US reported its crude output hit a record 12-million barrels a day, undermining efforts by Middle East-dominated producer club Opec to withhold supply and tighten global markets.

International Brent crude futures were at $66.87 a barrel at 3.26am GMT, down 20c, or 0.3%, from their last close.

US West Texas Intermediate (WTI) crude oil futures were at $56.84 a barrel, down 12c, or 0.2%, from their last settlement.

US crude oil production reached 12-million barrels a day for the first time last week, the Energy Information Administration (EIA) said on Thursday in a weekly report.

That means US crude output has soared by almost 2.5-million barrels a day since the start of 2018, and by a whopping 5-million barrels a day since 2013. America is the only country to ever reach 12-million barrels a day of production.

As output surges, US oil stocks are also rising.

US commercial crude oil inventories rose by 3.7-million barrels to 454.5-million barrels in the week ended February 15, the Energy Information Administration said.

Analysts say US output will rise further and that oil firms will export more oil to sell off surplus stocks.

“We see total US crude production hitting 13-million barrels a day by year-end, with 2019 averaging 12.5-million barrels a day," US bank Citi said following the release of the administration’s report.

Of that, the bank said, “we could be seeing some weeks with 4.6-million barrels a day of gross crude exports by end-year, adding to this week’s new record” of 3.6-million barrels a day.

Friday’s dips at least temporarily halted a rally that pushed crude prices this week to their highest for 2019 so far amid the supply cuts led by producer cartel Opec.

Opec and some non-affiliated producers such as Russia agreed late in 2018 to cut output by 1.2-million barrels a day to prevent a large supply overhang from growing.

Another recent price driver has been US sanctions against oil exporters Iran and Venezuela.