Oil prices dipped on Thursday after data showed record U.S. crude oil production, which resulted in a surge in stockpiles.
Outside the United States, however, oil markets remained tense as all exemptions to U.S. sanctions on Iran expire, the political crisis in Venezuela escalates, and as producer club OPEC keeps withholding supply.
Spot Brent crude futures, the international benchmark for oil prices, were at $72.09 per barrel at 0032 GMT, down 9 cents, or 0.1 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down 2 cents, at $63.58 per barrel, having eased 0.5 percent in the previous session.
"Crude oil prices fell sharply as stockpiles in the U.S. rose to their highest level since 2017," ANZ bank said on Thursday.
"This comes as U.S. refineries head into the spring maintenance period, stoking fears that crude oil demand will be soft and stockpiles will continue to rise," it added.
U.S. crude stockpiles last week rose to their highest since September 2017, jumping by 9.9 million barrels to 470.6 barrels, as production set a record high of 12.3 million barrels per day (bpd), while refining activity rates fell, the Energy Information Administration (EIA) said on Wednesday.U.S. oil production & inventory levels: https://tmsnrt.rs/2WksBC7Outside the United States, however, oil markets remained tight amid the political crisis in Venezuela, tighter U.S. sanctions against Iran that allow no more exemptions from May, and as the Organization of the Petroleum Exporting Countries (OPEC) continues to withhold supply in order to prop up prices.
Oman`s energy minister Mohammed bin Hamad al-Rumhy said on Wednesday it was OPEC`s goal to extend the cuts, which were started in January, when they next meet in June.
For producers, the tight market conditions mean higher profits.
Analysts at Bernstein Energy said current price levels reflected the average marginal cost for most listed oil producers.
"We have surveyed the 50 largest listed oil and gas companies globally... Based on 2018 annual reports we estimate that the global marginal cost of oil remained stable at $71 per barrel," Bernstein said in a note on Thursday.
"This is on line with current spot prices but higher than the long-term oil forward strip price of $61 per barrel," the note said.
"With oil prices rising more than costs, industry margins increased by more than 200 percent in 2018," Bernstein said, resulting in industry profitability "at the highest in the last 5 years."
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)