TEHRAN: Oil prices rose by almost 1 percent on Tuesday, lifted by a weak dollar, tensions in the Middle East and concerns of a further fall in Venezuelan output.
The International Energy Agency said last week that Venezuela, where an economic crisis has cut oil production by almost half since early 2005 to well below 2 million barrels per day was “clearly vulnerable to an accelerated decline,” and that such a disruption could tip global markets into deficit.
Still, surging US crude oil production which has risen by more than a fifth since mid-2016, to 10.38 million bpd, has been looming over oil markets.
US output is now higher than that of top exporter Saudi Arabia. Only Russia produces more, at around 11 million bpd, although US output is expected to overtake Russia’s later this year as well.
Soaring US output, as well as rising output in Canada and Brazil, is undermining efforts by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) to curb supplies and bolster prices.
Rising US oil output isn’t just being refined at home either, as WTI’s widening discount to Brent makes US crude exports attractive.
