London — Crude oil futures fell Thursday in the late European morning despite a sizable draw in US crude stocks reported by the Energy Information Administration, as US crude production soared above 12 million b/d.
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At 1142 GMT, ICE April Brent crude futures were down 51 cents from Wednesday's settle at $65.88/b, while the NYMEX April light sweet crude contract was 21 cents lower at $56.73/b.
According to the EIA, US commercial crude inventories fell by 8.65 million barrels to 445.87 million barrels in the week to February 22. This went against analysts' expectations of a 4-million-barrel build over the same period, a survey conducted by S&P Global Platts Monday showed.
The large decline snapped five consecutive weeks of builds and pushed inventories to levels last hit in mid-January. Despite this, record-high US domestic crude production led to lower prices, industry sources said.
"US production crept to a record 12.1 million b/d and is checking prices. The EIA has indicated 13 million b/d peak in 2019," resource analyst at Fat Prophets David Lennox said.
Meanwhile, economic concerns in Asia also kept investors at bay, industry sources said.
"Global indices generally dipped this [Thursday] morning, as lackluster data coming from Asia continues to weigh on market confidence," investment analyst at Phillip Futures Samuel Siew said.
"Japan's industrial production fell at its fastest pace in a year...the Chinese manufacturing sector contracted for the third consecutive month, and was even lower than forecasts. These signs indicate that the global economic growth is receding, and that the global slowdown may be more severe than expected," Siew added.
In other news, market participants are also keeping a close eye on the escalating tensions between India and Pakistan.
"India is a big player in the oil and LNG market. Pakistan is an emerging and key regional market to watch for LNG and fuel oil movements. So, industry players will be keeping a very close eye on the situation there and how it develops," Head of Asia at S&P Global Platts Analytics Kang Wu said.
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