Crude Hits One-week Low On expectations U.S. Producers Boost Output

Crude oil prices fell sharply on Wednesday on expectations that U.S. producers would boost output significantly to take advantage of prices that are around thirteen-month highs.

Crude oil for February delivery on the New York Mercantile Exchange fell as much as 2.4% to the intra-day low at $51.21 per barrel, a level not seen since January 11, after IEA Executive Director Fatih Birol forecast a “significant” boost to U.S. output given higher oil prices. The IEA’s monthly oil market report is due on Thursday.

On the other hand, OPEC on Wednesday signaled a falling oil supply surplus in 2017 as both OPEC and non-OPEC members are sticking to their output-cut agreement. . In its monthly oil market outlook released earlier, OPEC reported 33.085 million barrels of crude oil were pumped per day in December by its member. That was down 221,000 bpd from November.

OPEC also cut its expectation of non-OPEC supply in 2007. Despite an upwardly revised forecast of U.S. supply, OPEC forecast non-OPEC supply to rise by 120,000 bpd this year, down from growth of 300,000 bpd last month.

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