Brent oil rises above $60, buoyed by United States inventory drawdown

Oil Demand

Oil Demand

United States dry natural gas output was up 12 percent to 28.6 billion cubic feet per day last year, notching a record high for two consecutive years.

Future prices for West Texas Intermediate, the USA benchmark, rose by 2.4 percent to $56.21 per barrel, while worldwide benchmark Brent crude rose by 1.9 percent to $59.74 per barrel on Monday.

According to the EIA, for the United States and Russian Federation, petroleum and natural gas production is nearly evenly split.

US crude oil production increased by 17% in 2018, setting a new record of almost 11.0 MMbpd, equivalent to 22.8 quadrillion British thermal units (Btu) in energy terms. President Donald Trump said Tuesday he could cut taxes without congressional approval as the US economy flashes recessionary warning signs.

In theory, there is just another week left of peak summer driving demand left in the United States before the September 2 Labor Day holiday.

The U.S. also produced 4.3 Mmbpd of Ngpls in 2018, equivalent to 5.8 quadrillion Btu.

The United States' combined output of 28 percent in natural gas and petrol production past year has made it the world's biggest producer of these precious commodities, the Energy Information Administration (EIA) reported on Tuesday. U.S. Ngpl production has more than doubled since 2008, when the market for Ngpls began to expand. Russian Federation exports most of the crude oil that it produces to European countries and to China. Russia's crude oil is also an important source of supply to China and neighboring countries. The current advancement in exports of liquefied natural gas and the upgraded capability to penetrate new markets have jacked up growth in America's natural gas stockpiles. The US had already beaten Russian Federation as the globe's largest natural gas producer in 2011.

The Joint Petroleum Data Initiative (JODI) reported this Tuesday Saudi Arabia " s oil exports fell in June compared to the previous month.

"The oil market seems to be pricing in again a geopolitical risk premium following the weekend drone attacks on Saudi Arabia, but the premium might not sustain if it does not result in any supply disruptions", said Giovanni Staunovo, oil analyst for UBS.

Overall oil demand concerns continue to weigh on oil. Since 2016, Saudi Arabia's direct crude oil burn for electric power generation has decreased for a number of reasons, including demand reductions from a partial withdraw of power subsidies, greater use of residual fuel oil, and increased availability of domestic natural gas. December Brent crude oil is nearing a technical retracement zone at $59.87 to $60.95. "But the market is definitely taking the glass-half-empty type approach to data" due to fears about the trade war and slowing growth, he said.