Crude oil futures slip 0.38 pc

A BNSF oil train snakes through the Yakima River Canyon near Ellensburg Washington US

A BNSF oil train snakes through the Yakima River Canyon near Ellensburg Washington US

The optimism may seen questionable considering one of the biggest fears of analysts and many Middle Eastern energy ministers was that the OPEC cutback extension would escalate prices and encourage more USA production, thus replenishing the crude glut that caused the price meltdown to begin with.

A gas station attendant pumps fuel into a customer's vehicle at a gas station in Shanghai, China November 17, 2017.

Meanwhile, West Texas Intermediate crude oil was down by 22 cents, or 0.38 per cent, to Dollars 57.14, while Brent fell 23 cents, or 0.36 per cent, to trade at USD 63.17 a barrel.

The output cuts pushed oil prices higher between June and October, with Brent gaining around 40 percent.

And indeed this seems to be playing out, with data this week showing that USA crude output had risen 25,000 barrels per day (bpd) to 9.7 million bpd in the week to December 1, the highest production since the 1970s and close to the production levels of Russian Federation and Saudi Arabia. As Reuters writes in an article "Oil rises 1 percent on China demand, but weekly losses loom", Brent crude was up 99 cents or 1.6 percent at $63.25 a barrel, but heading for a weekly slide of 0.9 percent.

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China's crude oil imports rose to 37.04 million tonnes in November, or 9.01 million barrels per day (bpd), the second highest on record, data from the General Administration of Customs showed on Friday.

That's the highest level since the early 1970s, and close to levels from top producers Russian Federation and Saudi Arabia.

Soaring U.S. output threatens to undermine efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation to bring production and demand into balance following years of oversupply.

The number of rigs drilling for new oil output in the United States rose by two in the week to December 8, to 751, the highest level since September, General Electric Co's Baker Hughes energy services firm said on Friday.

However, some uncertainty remains over the reliability of this commitment as well as over how suddenly the group will increase output once the voluntary restraint ends. The oil minister said OPEC could end the cuts early if the market rebalances and noted that Russian Federation is especially keen to pump more. The UAE holds OPEC presidency in 2018.

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