United States crude oil production expected to increase into 2018, EIA report says

US crude oil production likely to increase through end of 2017 - EIA

A Reuters report that India was set to emerge as a key market for American crude exports in the coming months, as refineries were ramping up "test" purchases of United States grades to diversify imports.

On October 2, the first in a series of shipments of U.S. crude oil to India arrived at Odisha's Paradip port.

"A lot of these (Indian refiners) want to see what it's like if they run it", said one Houston-based oil broker.

The discount for WTI makes USA crude oil competitive in some Asian markets.

A technical pattern known as a "golden cross" was approaching in WTI crude oil contracts on Wednesday, in which the 50-day moving average climbs higher than the 200-day. Harold Hamm, the company's CEO, said the sale represented the "new normal" and argued WTI should be priced closer to Brent now that more US oil was on the export market. American crude oil shipments to India have the potential to boost bilateral trade by up to $2 billion.

Foreign refiners, including those in India, have bid up those physical grades against the U.S. crude benchmark to multi-year highs, traders and brokers said.

In June, Indian Prime Minister Narendra Modi and US President Donald Trump met and discussed energy exports to India.

Crude flows through the 600,000 barrel-per-day (bpd) Kurdish pipeline to the Turkish port of Ceyhan have dropped off sharply to around 225,000 bpd, a shipping source told Reuters.

The report projects that the majority of crude oil production growth in the second half of the year will be in the Permian region, which extends across west Texas and into southeastern New Mexico.

One supertanker carrying almost 2 million barrels discharged in India earlier this month, according to Eikon shipping data, while two other vessels carrying a combined 3 million barrels are set to arrive in November. Continental Resources said it sold 1 million barrels of oil from its Bakken shale basin in North Dakota to a trading company that would take it from the storage hub in Cushing, Okla., to southern ports for intended delivery to China.

Crude inventories fell by 5.7 million barrels in the week to October 13, compared with analysts' expectations for an decrease of 4.2 million barrels.

Bank of America-Merrill Lynch said last week the spread, or difference, between WTI and Brent, the global benchmark, is what made USA crude oil competitive.

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