U.S. can outrun Russia and Saudi Arabia in terms of oil production

Crude prices rose to their highest so far in 2019 on Monday after data showed refinery processing in China, the world’s second-largest oil consumer, climbed to a record last year despite a slowing economy. International Brent crude oil futures LCOc1 were at $62.75 per barrel at 0747 GMT, up 5 cents, or 0.1 percent, from their last close. Brent earlier rose above $63 for the first time in 2019. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $53.87 a barrel, up 7 cents, or 0.1 percent. WTI earlier advanced above $54 a barrel for the first time this year.

Traders said the price rises came after data released by China’s National Bureau of Statistics on Monday showed crude oil refinery throughput climbed to a record 603.57 million tonnes in 2018, or 12.1 million barrels per day (bpd), up 6.8 percent from the previous year. The strong oil demand figures came despite China’s 2018 economic growth slowing to the weakest in 28 years, at 6.6 percent versus 6.8 percent in 2017. Although the slowdown was in line with expectations and not as sharp as some analysts had expected, the cooling of the world’s No.2 economy casts a shadow over global growth. Despite this, analysts said supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) would likely support crude oil prices.

U.S. crude oil production C-OUT-T-EIA still rose by more than 2 million bpd in 2018, to a record 11.9 million bpd. With the rig count stalling, last year’s growth rate is unlikely to be repeated in 2019, although most analysts expect annual production to average well over 12 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.

Oil reaches 2019-high on strong China crude use, but economic slowdown looms, Reuters, Jan 21