Oil prices fell to their lowest in six weeks on Thursday after data showed US crude output had reached record highs and the North Sea’s largest crude pipeline reopened following an outage. Brent futures were down 74 cents, or 1.1 percent, at $64.77 a barrel by 12:14 p.m. EST (1714 GMT), their lowest since December 22. US West Texas Intermediate (WTI) crude, meanwhile, was down 86 cents, or 1.4 percent at $60.93, its lowest since January 3.
That put both benchmarks on track to decline for a fifth consecutive day, the longest losing streak for Brent since November 2017 and for WTI since April 2017.
Brent futures have lost almost 10 percent since hitting a four-year high above $71 in late January.
“Oil prices remain under pressure in today’s trading session as market participants continue to digest yesterday’s bearish oil inventories report,” Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London.
The US Energy Information Administration (EIA) on Wednesday said crude production last week rose to a record high of 10.25 million barrels per day (bpd). At that level, US production would overtake the current output in Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries.
Investors in crude are still sitting on one of the largest bullish positions in history. Money managers own more 1 billion barrels of crude oil through their holdings of US and Brent futures and options. Oil prices were also dented by the restart of the Forties pipeline in the North Sea, following an outage the previous day that had sent prices higher when it was announced.
The pipeline, which carries around a quarter of all North Sea crude output and roughly a third of Britain’s offshore natural gas production, shut on Wednesday for the second time in two months after a valve closure at a Scottish facility.
“It is now clear that oil prices in late January were too high to keep the oil market balanced in the long term,” Commerzbank analysts wrote. “This is because U.S. oil production is now rising so sharply that there is a risk of renewed oversupply if OPEC does not voluntarily renounce market share.”
Earlier this week, the EIA projected U.S. production would rise to a record high annual average of 10.6 million bpd in 2018 and 11.2 million bpd in 2019, up from 9.3 million bpd in 2017.
The current all-time U.S. annual output peak was in 1970 at 9.6 million bpd, according to federal energy data.
Chinese consumption of oil meanwhile is rising, as reflected by the surge to a record 9.57 million bpd in imports in January, according to official customs data.