In March, it jumped 215,000 barrels per day (bpd) to 10.47 million bpd, a new monthly record, the Energy Information Administration said on Thursday.
The Iranian light crude price settled at $77.03 per barrel in the mentioned week, Shana reported on Saturday. For the week, WTI was on track to drop about 3 per cent, adding to last week's near 5 per cent decline. "Which one is going to win is the issue", said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
If China and the United States do manage to reach some kind of trade consensus, it may encourage Chinese buying of US crude, even if it doesn't necessarily make economic sense. It also estimated that OECD crude oil inventories had fallen 20 million barrels below the five-year average for the first time since the output cuts began.
The discount between USA and Brent crude has now blown out to around $US11 a barrel, the largest it has been since mid 2015 and a sign the growing production and bottlenecks in pipelines and storage is now capping price growth and indeed putting downward pressure on United States prices.
But despite the differential as well as substantial recent losses for both benchmarks, at least one analyst believes there is something else to consider, namely the idea that prices won't keep falling because it will be tough for even record-breaking USA output to meet global demand.
Meanwhile in the US, bottlenecks in key shale plays such as the Permian basin are keeping record-breaking levels of output trapped.
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"Investors will hold tight till June 22 as OPEC members meet in Vienna (to consider).supply cut policies for 2018 and beyond", said Benjamin Lu, a commodities analyst at Singapore-based broker Phillip Futures.
Hedge funds invested in US oil are betting pipeline bottlenecks will make Texas crude even cheaper.
The second-largest fall in May came from Venezuela, whose production declined to 1.45 million bpd from 1.50 million bpd, compared to the implied target of 1.972 million bpd, which means that Venezuela's involuntary "cut" in May was 617,000 bpd-more than the cut pledged and achieved by OPEC's biggest producer Saudi Arabia.
Saudi Arabia, effective leader of the Organisation of the Petroleum Exporting Countries (OPEC), and Russian Federation have discussed boosting output to compensate for supply losses from Venezuela and to address concerns about the impact of USA sanctions on Iranian output.
While the paper futures market makes a compelling case for US crude exports, pricing in the physical markets is far less convincing.
Rosneft PJSC is testing its capacity to bring back production it cut under the deal between Moscow and OPEC by boosting output this week by about 70,000 barrels a day, Renaissance Capital said.