US oil production is rising and a backlog of uncompleted wells raises the risk of further price weakness later in the year. (Stockvault)
Rising production in the United States is proving to be a headache for oil prices. US crude oil production increased to 9.1 million barrels per day (MMb/d) in early March; this was up by 680,000 b/d from the 2016 low point of 8.4 MMb/d, reached in July, when low oil prices took their toll on domestic shale production. This has neutralised the impact of OPEC production cuts agreed in November 2016, which were due to take effect in January with supporting cuts by a group of non-OPEC producers.
After briefly rallying towards the end of last year, when OPEC and the non-OPEC countries pledged cuts of 1.2 MMb/d and around 600,000 b/d respectively, prices dropped in March to three-month lows close to $50 per barrel for North Sea Brent and $47/bbl for West Texas Intermediate.
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