Gas prices are at their highest in months and expected to rise further. The rocky mountain region of the U.S.is known for its shale oil production.
Oil prices extended gains on Thursday as a weaker USA dollar made the dollar-priced commodity more attractive for holders of other currencies.
Saudi energy minister Khalid al-Falih, who chairs a six-country monitoring committee overseeing the OPEC/non-OPEC production cut agreement, suggested at a January 21 meeting in Oman that the coalition may need to be more nimble with its inventories target and tweak it to take into account crude grades and regional inventories.
Texas' November production of 3.9 million barrels a day accounted for almost 40 percent of US output. Royal Dutch Shell Plc said improved exploration and production lifted its quarterly profit to a three-year high, while refining and trading fell short of expectations as margins shrank. This 10 million number is a big deal, as it puts the United States on par with the production of Oil giant Saudi Arabia and is eclipsed only by that of Russian Federation, who put in an average of 10.98 million barrels per day past year. At 418.4 million barrels, US crude oil inventories are in the middle of the average range for this time of year.
Oil prices have been rising strongly on the global market. Yet the size of these inventories can not be predicted yet, especially with the long string of draws during the winter, when demand for fuel is usually lower. A decade ago, falling domestic production and a USA ban on exports meant that WTI served mostly as a proxy for US inventory levels."There was a time when the USA was disconnected from the global market", said Greg Sharenow, portfolio manager at PIMCO, who co-manages more than $15 billion in commodity assets.
The West Texas Intermediate for March delivery increased 1.07 USA dollars to settle at 65.80 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April delivery added 0.60 dollar to close at 69.65 dollars a barrel on the London ICE Futures Exchange. WTI prices have been on an upward trend since February 2016. In fact, Canadian oil exports have surged as US refineries especially on the Gulf Coast prefer heavier Canadian oil over light shale.
Oil prices had earlier been supported by strong compliance with output cuts by OPEC and its ally Russian Federation, as well as expectations for strong demand growth in 2018.
OPEC oil output has risen in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela and strong compliance with a supply reduction pact, a Reuters survey found on Tuesday. The bank's bullish outlook is driven by its revised demand forecasts, reflecting stronger economic growth in emerging markets.
Today, crude oil is gaining to recover some of the gains it had yesterday.