US output falls again to buoy oil prices

Global benchmark Brent crude rose 0.7 per cent to $37.31 per barrel this morning, putting it on course to end the week with a gain of more than five per cent.

Meanwhile, West Texas Intermediate crude, the US benchmark, swelled 0.72 per cent to $34.82.

US oil inventories hit a new record of 517.98m barrels last week, but production fell for the sixth consecutive straight week to 9.08m barrels per day, according to data released by the Energy Information Administration today.

Many analysts are expecting US oil production to tail off this year, as banks become more reluctant to make loans to the country’s cash-strapped shale producers.

Despite proving more resilient than expected, they’re finally starting to succumb to low oil prices, which have fallen around 70 per cent since June 2014.

The tight credit market has been making it increasingly difficult for US shale producers to refinance upcoming debt which may precipitate an accelerated decline in U.S. oil production over the next 12 to 18 months.

De facto Opec leader Saudi Arabia entered into a preliminary production cut deal with Russia Qatar and Venezuela in Doha last month but Iran has vowed to continue pumping more oil, as it seeks to regain market share lost during years of economics sanctions.