Oil slips toward $66 a barrel as U.S. output offsets
OPEC curbs
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[February 23, 2018]
By Alex Lawler
LONDON (Reuters) - Oil slipped toward $66 a
barrel on Friday as rising U.S. oil output and exports countered
OPEC-led attempts to erode stockpiles with output curbs and a dip in
Libyan production.
U.S. oil production last week was steady at 10.27 million barrels per
day, a record level if confirmed by monthly figures. Crude exports
jumped to more than 2 million bpd, close to a record 2.1 million hit in
October.
"The U.S. is pumping out a record amount of oil," said Naeem Aslam,
chief market analyst at Think Markets UK Ltd.
"The bull rally which we have seen for the black gold could fade away as
the U.S. oil production undermines the OPEC production cut commitments,"
he said.
Brent crude, the global benchmark, was down 11 cents at $66.28 at 1243
GMT. Prices had rallied in early 2018 and reached $71.28 on Jan. 25, the
highest since December 2014. U.S. crude fell 10 cents to $62.67.

Prices recouped some losses following the shutdown of the El Feel
oilfield in Libya producing 70,000 bpd. Production in the OPEC member
has been running at about 1 million bpd although it remains volatile due
to unrest.
A stronger dollar weighed on prices. A firmer dollar can make oil and
other commodities denominated in the U.S. currency more expensive for
other currency holders.
The latest decline for crude came despite the U.S. Energy Information
Administration reporting crude stocks fell unexpectedly by 1.6 million
barrels. Analysts said low import figures contributed to the decline.
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A gas station attendant
pumps fuel into a customer's car at a gas station in Shanghai, China
November 17, 2017. REUTERS/Aly Song/File Photo

U.S. production is expected to rise even more this year and top 11 million bpd
in late 2018, a headwind for OPEC efforts to drain stockpiles.
But the Organization of the Petroleum Exporting Countries is not outwardly
worried by rising U.S. output and says it is comfortable at the speed the market
is moving toward balance.
"I think the pace is excellent, the deal is working and we're very happy with
it," United Arab Emirates Energy Minister Suhail al-Mazroui, the current OPEC
president, told Reuters on Wednesday. "But the job is not yet complete."
In January 2017, OPEC and allies including Russia began to cut production by
about 1.8 million bpd, almost 2 percent of global supply, to get rid of a glut
that had built up since 2014 and that led to a price collapse.
OPEC wants to reduce inventories held by industrialized nations to their
five-year average and is getting closer to that goal.
(Additional reporting by Henning Gloystein; Editing by Edmund Blair and David
Evans)
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