Oil prices fall as U.S. crude production hits another record

Oil prices eased on Thursday, dragged down by rising output, although strong demand and a drop in U.S. fuel inventories provided the market with some support.

Brent crude futures (LCOc1), the international benchmark for oil prices, were at $76.46 per barrel at 0046 GMT, down 28 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures (CLc1) were at $66.58 a barrel, down 6 cents from their last settlement.

Prices were pulled down by another rise in U.S. oil production , which hit a weekly record of 10.9 million barrels per day (bpd) last week, according to the Energy Information Administration (EIA) on Wednesday.

U.S. crude output has risen by almost 30 percent in the last two years, and it is now close to top global producer Russia, which produced 11.1 million bpd overall in the first two weeks of June.

But the rising output came amid strong demand, which traders said prevented crude prices from falling further.

U.S. energy firms chasing oil price rally stumble on old baggage

With oil price recovery taking hold, several U.S. oil and gas companies entered 2018 with a compelling plan – sell undeveloped or less essential fields and invest the money to boost returns from their sweetest, most productive spots.

There is a catch, though. The strategy assumes that with crude now up more than 150 percent from its February 2016 bottom enough firms are keen to crank up production, even if it means buying fields with higher extraction costs and lower margins.

So far, sale attempts suggest those buyers may be hard to come by. After a bruising downturn, shareholders are looking to get a cut of improved profits and asset sale proceeds rather than underwrite acquisitions, those involved in these deals say.

“Oil and gas companies are no longer rewarded for simply ‘grabbing land’ and public investors have become more discerning regarding acquisitions,” notes Jon Marinelli, head of U.S. energy investment and corporate banking at BMO Capital Markets.

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