- Oil production in the US increased by almost 1%, according to the US EIA.
- US President Joe Biden calls oil companies to raise production to lower gasoline prices.
- China’s weak factory activity, and Covid-19 restrictions, were headwinds for oil prices.
The US crude oil benchmark, also known as Western Texas Intermediate (WTI), slides from around $88.260s on broad US Dollar strength, alongside estimates that US production could rise amidst weaker than estimated China’s data, threatening to slow down the second-largest economy. At the time of writing, WTI is trading at $86.26 per barrel, below its opening price by 2.28%.
According to the US Energy Information and Administration (EIA), production in the United States increased by 0.9% in August to almost 12 million barrels per day, its highest since March 2020. Data showed that crude oil production in Texas and New Mexico grew by 1.6% and 0.6%, respectively, contrary to North Dakota, with production falling by 0.5%.
Aside from this, the White House reported that the President of the United States, Joe Biden, will acknowledge the record profits by oil companies while Americans struggle to pay high fuel prices at around 20:30 GMT. The White House said Biden would speak after major oil companies reported record profits, led by Exxon Mobil and Chevron, which benefitted from surging natural gas and fuel prices.
Biden asked US companies to raise production instead of using profits for share buybacks and dividends.
Elsewhere, China’s manufacturing data weakened, as an official survey showed on Monday, weighed by soft demand and the zero-tolerance Covid-19 restrictions.
Additional headwinds for global oil demand is the Eurozone entering a recession, as last week’s Global S&P PMIs reported by the block keep raising concerns about the ongoing slowdown.
Of late, the Organization of the Petroleum Exporting Countries (OPEC) raised its forecast for world oil demand in the medium-longer term in an annual outlook revised on Monday. The cartel said $12.1 trillion of investment is needed to meet demand despite the energy transition.
WTI Key Technical Levels
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