US oil prices dip on rising crude inventories, record output

US oil prices dip on rising crude inventories, record output

"We expect the oil price to rise in the first-half of 2019 on tightening supply conditions and decline in the second-half on weakening economic activity and an increase in USA crude exports to global markets", said French bank BNP Paribas.

The producers known as OPEC+ started cutting production by 1.2 million barrels per day (bpd) from last month to avert a new supply glut, and OPEC has delivered nearly three quarters of its pledged cuts already, a Reuters survey showed last week. Total expects its production to grow by more than 9 percent in 2019, thanks to the ramp-ups of Kaombo North, Egina, and Ichthys, as well as the start-ups of Iara 1 in Brazil, Kaombo South in Angola, Culzean in the United Kingdom, and Johan Sverdrup in Norway.

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Thursday, but inside the previous day's range.

Weighing on oil markets, USA government data showed new orders for US -made goods unexpectedly fell in November, with sharp declines in demand for machinery and electrical equipment. Energy information provider Argus Media, said producer cuts will eventually help level oil prices again as 2019 wears on. The month was Brent crude's best month since April 2016. OPEC supply fell last month by the largest amount in two years, a Reuters survey last week found.

"Basically it's a pretty supportive report", said Phil Flynn, oil analyst at Price Futures Group in Chicago.

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USA crude inventories rose by 2.5 million barrels last week and gasoline stocks also increased, the American Petroleum Institute said. For instance, Treasury officials rejected refiners' pleas to allow them to complete oil transactions that were contracted before sanctions were imposed without paying into a special account walled off from Maduro.

Market participants have already been focused on signs of tightening global crude supply after the Organization of the Petroleum Exporting Countries (OPEC) and allies began an agreement in January to cut output.

Worries about weaker global economic growth and the U.S.

However, while OPEC is cutting output, the United States has expanded supply, with production most recently totaling 11.9 million bpd.

US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached.

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