US Crude Exports to Asia Slump as WTI Outperforms

Oil Market Will Be Dominated By U.S. Producers For 5 Years

Yet overall US output this year will average 10.7 million barrels a day, breaking the 1970 record of 9.6 million barrels a day, according to EIA's monthly Short-Term Energy Outlook.

The EIA said on Tuesday it expects U.S. crude output in the fourth quarter of 2018 to reach an average of 11.17 million bpd, up from the previous forecast a month ago of 11.04 million bpd.

USA crude oil and stock index figures shifted lower Wednesday amid global market fears on a trade war, the resignation of President Donald Trump's chief economic adviser and rising inventories.

Asian imports of 726,600 bpd of US crude in November and January's 676,190 bpd were the strongest two months on record, showing that the region's traders were quick to take advantage of the weakening of WTI relative to Brent.

April WTI crude oil futures settled at $61.15, down $1.45 or -2.32% and May Brent crude oil finished the session at $64.34, down $1.45 or -2.20%.

Brent crude futures fell $US1.74 to $US64.05 a barrel, a 2.6 per cent loss. Cohn, a free trade advocate and former president at Goldman Sachs, had opposed Trump's plans for the proposed tariffs on aluminum and steel.

The volume of shipments is significantly more than the record 179,000 BPD reached in September 2014, before oil prices dropped.

Oil fell by the most in more than three weeks as equities declined, the dollar rose and a US government report showed an expansion of crude stockpiles and production. Trump's protectionist theme adds a new wave of concerns, with increasing signs of a trade war leading to turbulence in some risk assets.

This matched the expectations of traders and refiners in the region surveyed ahead of the release, and shows the Saudis are still trying to ensure their crude remains competitive, even as they maintain a commitment to restrain output by the terms of the agreement between the Organization of the Petroleum Exporting Countries and allies, including Russian Federation.

Meanwhile, gasoline stocks fell by 788,000 barrels, a smaller decline than the 1.2 million barrel drop forecast by analysts in a Reuters poll. Traders are responding to White House comments saying Canada and Mexico, and possibly other countries, may be exempted from planned USA import tariffs on steel and aluminum. Both benchmarks were trading down from last Tuesday afternoon.

Major powers, including the European Union and China, have said such tariffs could lead to retaliatory action and trigger a global trade war, hurting economic growth and oil consumption. USA output is expected to surpass that of Russian Federation, now the world's top producer at about 11 million barrels a day.

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