U.S. crude oil production growth is offsetting declines from members of the Organization of Petroleum Exporting Countries, keeping the price of oil in check. File Photo by Gary C. Caskey/UPI | License Photo
Aug. 17 (UPI) -- U.S. oil production is offsetting OPEC losses and keeping oil prices in check, though trends in fuel supplies are indicative of negativity, a trade group said.
The U.S. Energy Information Administration reported total crude oil production for the week ending Aug. 10 at 10.9 million barrels per day, meaning the United States is on par with Saudi Arabia in terms of global production leaders.
"With total U.S. liquid fuels production, up by more than 2.0 million bpd year-over-year, the United States has been the world's only substantive source of oil production growth so far in 2018 and more than compensated for production losses in some OPEC nations," API Chief Economist Dean Foreman said in a statement.
Of the 15 members of the Organization of Petroleum Exporting Countries, seven of them in July produced less on average than they did the previous month. OPEC members are voluntarily trimming production in an effort to support a market that was weakened significantly by a surplus in the five-year average in crude oil inventories held by the world's leading industrialized economies.
OPEC members were above compliance with their benchmarks for restraint, however, because some members like Libya and Venezuela were constrained by artificial means like sanctions and national security challenges. Non-OPEC members like Russia and the United States have been able to make up for the loss.
"As a result, domestic oil prices have remained lower than international ones which is good news for consumers," Foreman said.
Trends in the price of crude oil are usually mirrored in retail gasoline prices. According to motor club AAA, the average national retail price of $2.85 for a gallon of regular unleaded on Friday is about three quarters of percent less than this time last month. The price for Brent crude oil, the global benchmark, is down about six tenths of a percent from this time in July.
API data show the appetite for fuels used in the shipping industry was largely behind a surge in total U.S. petroleum demand. Its data suggested this ran counter to seasonal trends as trade patterns shift as a result of U.S. trade disputes.
International Monetary Fund Managing Director Christine Lagarde said those trade tensions could create risks for the global economy, especially in the short term. U.S. President Donald Trump has targeted Canada, China, European countries and Turkey so far with trade penalties, arguing the U.S. economy has been hampered by lopsided economic relationships.