Crude oil prices decline as US production reaches a new high

With the United States producing an expected 13.3 million barrels of crude oil per day, the price of crude oil fell by -1.39% to settle at 5943. Oil prices were further pressured by this increase in crude output, which was up 200,000 barrels per day from the previous week. The downward pressure was also fueled by worries about rising global crude inventories and weakening demand growth.

Concerns about an excess of oil on the market were sparked by the United States setting a record for crude production and by record outputs in Brazil and Guyana at the same time. Furthermore, the market was made more unstable by geopolitical developments like the unannounced withdrawal of Angola from OPEC, the disruption of trade in the Red Sea by Houthi rebel-attacked vessels, and the possibility of a protracted conflict in Gaza.

The U.S. Energy Information Administration reported that in October, rail shipments of crude oil from the United States increased by 17,000 barrels per day over the previous month to reach 226,000 barrels per day. Money managers increased their net long positions in U.S. oil futures and options in the week ending December 26, despite the difficulties, as reported by the U.S. Commodity Futures Trading Commission (CFTC).

The gang of speculators increased their position in combined futures and options in New York and London during this time by 15,954 contracts, to 84,266. From a technical perspective, there is currently new selling pressure on the crude oil market, as open interest has increased by 9.74%.

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