Global oil prices printed fresh 2019 highs Friday, taking crude to the highest levels since early November, as hopes for a U.S.-China trade deal that would stoke demand in the world's biggest energy market continue to offset record U.S. production.
The Energy Information Administration said Thursday that U.S. output hit 12 million barrel a day last week, the highest on record and a jump of more nearly 2 million barrels per day from the same period last year. Crude exports, as well, rose to a record 3 million barrels while domestic stockpiles grew by 3.7 million to just over 454 million.
That kind of production would normally take global crude prices lower, particularly when set against data from the world's biggest economies -- including the U.S., Japan and China -- that continue to suggest slowing growth, and weakening demand, in the months ahead.
However, a softer U.S. dollar, which generally triggers higher corresponding commodity prices, and the impact of OPEC production cuts, which along with allies such as Russia are taking 1.2 million barrels from the market each day, have acted as a counterweight to the surge in American drilling and the increasing supply from U.S. shale deposits in place such as the Permian Basin.
Brent crude contracts for April delivery, the global benchmark, were marked 48 cents higher from their Thursday close in New York and changing hands at $67.55, taking their year-to-date gain to around 25.5%. WTI contracts for the same month, which are more tightly-linked to U.S. gas prices, were seen 52 cents higher at $57.48 per barrel, but have only risen around 2.2% this week.
"WTI broke through a strong resistance zone this week and rather than being the catalyst for another tear higher, it's just stalled again," said Craig Erlam from Singapore-based brokerage Oanda. "That doesn't fill me with confidence near-term."
"That may change in the coming weeks but we'll need to see evidence that OPEC still has the sway it once did," he noted. "It's safe to say, Saudi Arabia has gone well above and beyond and the market shrugged. If US output starts to fall in line with oil rigs then that may change but for now, it's only going higher."