Crude Rates Drop As US Hits Record High In Production

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  • Crude oil prices faced a decline of -1.39%, settling at 5943.
  • This surge in crude output, up by 200,000 barrels per day from the previous week, added pressure to oil prices.
  • Concerns about increasing global crude supplies and slowing demand growth also contributed to the downward pressure.

Crude oil prices faced a decline of -1.39%, settling at 5943, as the United States reached a record high in crude production, estimated at 13.3 million barrels per day. This surge in crude output, up by 200,000 barrels per day from the previous week, added pressure to oil prices, reports Investing.

Crude oil prices drop

Concerns about increasing global crude supplies and slowing demand growth also contributed to the downward pressure. The U.S. achieving a record high in crude production, along with simultaneous record outputs in Brazil and Guyana, raised apprehensions about oversupply in the oil market. Additionally, geopolitical events, such as Angola’s unexpected exit from OPEC, vessel attacks by Houthi rebels disrupting trade in the Red Sea, and the potential for prolonged conflict in Gaza, added uncertainties to the market.

In October, U.S. crude oil shipments via rail rose by 17,000 barrels per day from the previous month, reaching 226,000 barrels per day, as reported by the U.S. Energy Information Administration. Despite the challenges, money managers increased their net long U.S. crude futures and options positions in the week ending December 26, according to the U.S. Commodity Futures Trading Commission (CFTC). The speculator group raised its combined futures and options position in New York and London by 15,954 contracts to 84,266 during this period.

Technically, the crude oil market is currently under fresh selling pressure, with a gain in open interest by 9.74%. Support is identified at 5834, and a breach below this level could test 5724. On the upside, resistance is likely at 6101, and a move above may lead to testing 6258.

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Source: Investing