Oil prices experienced a chopped session on Wednesday, supported by healthy global demand but at the same time held back by a rise in U.S. production that is undermining efforts led by producer cartel OPEC to cut supplies and prop up markets.
After the crude oil inventories regarding last weeks’ stockpiles in the US, the West Texas Intermediate crude oil futures touched a bottom at $60.11 per barrel on Wednesday before climbing back, above $61 per barrel.
Prices were receiving some support from healthy demand. Yesterday, the Organization of the Petroleum Exporting Countries (OPEC) said that in 2018, oil consumption was expected to grow by 1.62 million barrels per day.
The surge in U.S. crude output is poisoning the markets, which hit another record last week by rising to 10.38 million bpd, up by more than 23% since mid-2016.
According to the International Energy Agency, the U.S. crude production, which has already overtaken that of top exporter Saudi Arabia, is expected to rise above 11 million bpd later this year, taking the top spot from Russia.
OPEC on Wednesday raised its forecast for non-member oil supply to almost double the growth predicted in November of 2017. OPEC and several other non-OPEC producers led by Russia began cutting supply in January of 2017 to erase a global surplus of crude that had built up since 2014. A combination of those cuts and rising U.S. output mean that OPEC is losing market share.