Oil prices have decreased as major US producers Chevron and ExxonMobil released projections that pointed to a rise in shale production.
International Brent crude futures were down 39 cents at $65.47 per barrel, while US West Texas Intermediate (WTI) crude oil futures declined 41 cents at $56.15 per barrel, Reuters reported.
Oil prices further declined following an increase in weekly US crude stockpiles that outweighed supply cuts, led by the Organization of Petroleum Exporting Countries (OPEC).
Phillip Futures commodities analyst Benjamin Lu was quoted by Reuters as saying: “Crude oil futures continue to demonstrate whippy trades as markets balance between OPEC-led cuts and the effects of rising US production levels.”
ExxonMobil’s announcement that it plans to produce more than one million barrels of oil equivalent per day (MMboed) by as early as 2024 in the Permian Basin, located in Texas and New Mexico, led to a fall in oil prices.
The company also said that the size of its resource base in the Permian is approximately ten billion barrels of oil equivalent per day.
ExxonMobil senior vice-president Neil Chapman said: “We’re increasingly confident about our Permian growth strategy due to our unique development plans.”
Chevron expects to more than double its production in the Permian to 900,000 barrels per day (bpd) of oil and gas over the next five years.
Together, ExxonMobil and Chevron are targeting nearly 2MMboe/d in Permian production.
Data revealed by the American Petroleum Institute (API) highlighted an increase in US crude inventories by 7.3 million barrels to 451.5 million in the week ending 1 March 2019.
The rise in US production undermines ongoing efforts led by OPEC and its members to curb output by 1.2MMbpd.
Investors are awaiting official data to be released by the US Department of Energy’s Energy Information Administration.