Oil prices fell in after-hours trading in the United States after the country’s oil output hit its highest level in months and on signs that the Federal Reserve may continue to raise interest rates.
Brent crude futures were down 68 cents at $84.42 a barrel at 1,322 p.m. Both benchmarks gained more than 5.5% this week.
U.S. crude oil inventories increased to their highest level since June 2021, helped by higher production.
U.S. gasoline and distillate inventories also increased last week.
USA Federal Reserve officials said an interest rate hike is on the cards as the bank pushes ahead with efforts to curb inflation, sending bearish signals to risk assets such as oil and stocks.
But the prospect of stronger demand from China provided some support to oil prices as the world’s largest oil consumer ended more than three years of a strict zero-covid policy.
Brent’s front-month contract rose to a $3 a barrel premium to six-month contracts, a market style called a pullback that indicates traders are seeing tight current supply.
Natural gas prices tumble
A 47% drop in natural gas prices this year is roiling U.S. shale, threatening a decline in drilling and deals unthinkable six months ago as global demand surges.
Analysts are downgrading their outlook for gas prices this year, production, and earnings. The downturn also dampened merger and acquisition activity.
Such moves were unheard of six months ago as Russia cut gas flows to Europe and US gas became a hot commodity. In the first 6 months, the number of active gas rigs rose by about 48.5% to 157, according to oilfield firm Baker Hughes.
U.S. gas futures traded at $2.42 a British thermal unit (mmBtu) on Wednesday amid warm weather and extended plant shutdowns for LNG exports, up from $9 a mmBtu in August 2022. more than a decade.
The company says well-completion activity in the Haynesville gas region needs to decline by about 8% to keep storage from exceeding the 4.3 trillion cubic feet cap.
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