The rising USA output comes largely on the back of onshore shale oil production.
Oil markets climbed on Monday, March 12, on the back of a drop in the number of United States rigs drilling for more production and as the us economy continued to create jobs, which industry hopes will drive higher fuel demand, NAN reports. The West Texas Intermediate or WTI curd was trading at $61.25 a barrel, shedding a total of 11 cents or a total of 0.2% decline from its previous closing prices.
The reduction came as gross short positions on the New York Mercantile Exchange climbed to their highest level in almost a month.
For the first time since 2014, Brent oil reached $71 per barrel, as well as WTI crude futures rising to $66.35 per barrel, the highest price mark since December 2016.
U.S. tight oil production, or shale fracking, should rise by 131,000 barrels a day in April, to a record of 6.95 million barrels a day, according to the U.S. Energy Information Administration's latest drilling report released this week.
The report followed data from the EIA last week (http://www.marketwatch.com/story/oil-prices-under-pressure-ahead-of-us-supply-data-2018-03-07), which showed an increase of 86,000 barrels a day in total USA crude output for the week ending March 2.
On the other hand, the Iranian oil minister Bijan Zanganeh mentioned that the Organization of the Petroleum Exporting Countries or OPEC is going could come to a conclusion on their June meeting to ease the current production curbs by the year 2019.
"Oil prices fell on the back of concerns that surging USA production ... could push inventories in the US higher", ANZ bank said on Tuesday.
Crude oil prices are lower today after falling yesterday. That split is driven by differing views over whether $70 a barrel sends USA shale companies into a production frenzy that could cause prices to crash. Investors' bullish wagers on oil fell last week for the first time in three weeks.
Meanwhile, data out Friday did show that hedge funds and money managers cut their bullish bets on USA crude oil for the first time in three weeks. "Rising production and inventory in the United States has been reducing fund sentiment since it peaked at the end of January", ING said in a note.