The two-week long fall in crude oil prices began just after the commodity hit the $70-mark, with United States shale oil production recording a sharp rise and inventory levels rising. However, the crude price remains positive for this year.
Surging shale production is poised to push United States oil output to more than 10 million barrels per day - toppling a record set in 1970 and crossing a threshold few could have imagined even a decade ago. Gasoline and distillate stockpiles expanded as well.
The U.S. Energy Information Administration (EIA) this week also upped its 2018 average output forecast to 10.59 million bpd, up by a whopping 320,000 bpd from its last forecast just a week earlier.
Rising U.S. oil production has been looming over the market, with output up by 1 million bpd in the past year to about 10 million bpd.
At 10.25 million bpd, USA output is now higher than the previous 10.044 million bpd record from back in 1970. The 52-week range on March futures was $43.91 to $66.66.
US oil output increased for a fourth week, up by 332,000 bpd last week, EIA data showed. Last week's big builds were the result of higher production and fewer exports.
The US exported about 700,000 barrels of light domestic crude in December to the UAE, the Census Bureau reported Tuesday.
The EIA will issue its weekly update on petroleum supplies Wednesday morning, with analysts polled by S&P Global Platts forecasting a rise of 2.8 million barrels in crude stocks.
"Ongoing infrastructure expansions will likely contribute to further increases in China's crude oil imports", EIA reported.
The level of American oil production has 40 years of records.
International Energy Agency data shows that in the fourth quarter of 2017, refinery runs hit a record 81.5 million barrels per day (bpd). The OPEC review meeting in January suggested that output cuts in some form may remain beyond 2018 although the exact modalities need to be worked out. The FPS capacity is 575,000 barrels of oil per day. Overlooking all the other parameters, with the exception of the exchange rate, a stronger greenback should principally lead to a fall in crude-oil prices, and vice versa. The contract dropped $1.60, or 2.5 per cent, to settle at $61.79 on Wednesday, the biggest decline since January 8th. Previous year at this time, a gallon of regular gasoline cost $2.266 on average in the United States.
The White House today confirmed it was anxious about the U.S. stock market drop but insisted the fundamentals of the USA economy are strong as the stock markets declined.
Energy stocks climbed 3.8 per cent in January before stumbling almost 6 per cent this week as part of a broad market selloff. Chevron (CVX) rose 0.4%, Royal Dutch Shell (RDSA) eased 0.5%, and BP (BP) lost 0.2%.