Amid expectations of sustained US oil production growth, the US Energy Information Administration revised its forecasts for an output increase to 9.900 million barrels a day in 2018 from 9.300 million bpd this year, a gain of 570,000 bpd. This was below last month's forecast of a year-over-year increase of 680,000 bpd. Adding to the bullish sentiment was data from the American Petroleum Institute, which indicated that US crude inventories dropped by a massive 8.100 million barrels in the week ended July 7th to 495.5 million barrels.
However, reports revealing that Saudi Arabia produced more than 10.000 million bpd last month, exceeding its output quota, may hurt the fragile OPEC equilibrium ahead of today’s monthly report. Brent crude futures for September delivery are currently trading around $48.15 a barrel, with prices likely to encounter strong resistance near $48.80.