It seems insane to be stressing over oil when Brent is struggling to break through $80 a barrel and West Texas Intermediate is bobbing around $70, about one-third lower than their levels four years ago.
US Crude Oil futures remained under pressure in comparison to global Brent Crude, which rallied to push the spread between the 2 to the highest level in more than 3 years.
In addition to the EIA's numbers, which come close to matching those of top producer Russia, Baker Hughes disclosed in a report released Friday that USA energy companies added two oil rigs in the week to June 1, bringing the total count to 861, the highest level since March 2015.
"US production is growing, the line is growing straight up when you look at USA production", said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
While physical WTI crude is now at a strong premium to the futures, the opposite is the case when comparing paper Brent crude to the prices of similar physical grades. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.
WTI's discount to Brent widened to as much as $11.57 a barrel, largest since 2015, before narrowing to $10.76 a barrel as both grades retreated.
Concerns about growing United States crude production and a glut trapped inland due to a lack of pipeline capacity have pressured prices of WTI, doubling its discount to Brent over the course of a month.More news: Police investigate deadly hit-and-run at baseball game in Maine
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Crude inventories fell 3.6 million barrels in the week to May 25, compared with analysts' expectations for a decrease of 525,000 barrels.
Brent hit a three-week low below $75 a barrel on Monday after OPEC and its allies, including Russian Federation, indicated they could adjust their deal to curb supplies and increase production, but recovered later in the week.
During the next OPEC meeting slated for June 22-23 in Vienna, the countries are expected to discuss terms of the agreement and potential adjustments based on current market conditions, among other issues.
OPEC and some non-OPEC producers have committed to curbing their output by about 1.8 million bpd until the end of 2018.
According to the latest available figures by OPEC's secondary sources-the ones that OPEC uses to measure quotas and compliance with the deal, OPEC's production in April increased by 12,000 bpd over March, to average 31.93 million bpd, as Saudi Arabia boosted its production by 46,500 bpd.
Hedge funds invested in USA oil are betting pipeline bottlenecks will make Texas crude even cheaper. Prices for physical barrels of U.S. light sweet crude delivered at Midland are at their largest discount to the benchmark USA futures price in nearly four years.