By Nicole Friedman
U.S. oil prices fell below $75 a barrel Thursday as U.S.
production soared to its highest in decades.
U.S. oil production rose above 9 million barrels a day in the
week ended Nov. 7, the U.S. Energy Information Administration said
Thursday. On a monthly basis, average production last exceeded 9
million barrels a day in 1986.
"If you asked if this were possible 10 years ago, people would
have said you were crazy," said Phil Flynn, analyst at the Price
Futures Group in Chicago. "The market's starting to believe that
[the U.S. is] on tap to be the world's largest producer."
The U.S. is the third-largest crude producer. Russia produced
10.1 million barrels a day of crude oil last year, according to the
EIA, while Saudi Arabia's output averaged 9.7 million barrels a
day.
Light, sweet crude for December delivery fell $2.97, or 3.9%, to
$74.21 a barrel on the New York Mercantile Exchange, the lowest
settlement price since Sept. 21, 2010.
Brent, the global benchmark, lost $2.46, or 3.1%, to settle at
$77.92 a barrel on ICE Futures Europe, the lowest level since Sept.
9, 2010.
The Brent contract for December delivery expired at settlement
Thursday. The more-actively traded January contract fell $3.63, or
4.5%, to $77.49 a barrel.
U.S. oil production has soared in recent years as hydraulic
fracturing and horizontal drilling techniques have enabled
producers to access supplies trapped in shale-oil fields.
The EIA said in a separate report Wednesday that U.S. production
hit 8.9 million barrels a day in October, the highest monthly level
since March 1986, and projected that production would exceed 9
million barrels a day, on average, in December.
In 2015, production would represent the highest level of annual
average oil production since 1972, the EIA said.
December reformulated gasoline blendstock, or RBOB, slid below
$2 a gallon briefly before settling down 10.54 cents, or 5%, at
$2.0016 a gallon, the lowest settlement since Sept. 29, 2010.
December diesel fell 8.48 cents, or 3.5%, to $2.3621 a gallon,
the lowest level since Nov. 30, 2010.
Write to Nicole Friedman at nicole.friedman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires