NEW YORK: Oil prices fell to a one-month low on Wednesday after US data showed a build in inventories and record high crude production, raising worries of more selling that could expose speculators with big bets on upward momentum in crude prices. US West Texas Intermediate (WTI) crude fell $1.60, or 2.5 percent, to settle at $61.79 a barrel. WTI hit a low of $61.33, the lowest since Jan. 5. Volumes were heavy, with more than 957,000 front-month futures trading, far more than the average of 634,000 contracts over the last 200 days. Brent crude futures fell $1.35, or 2 percent, to $65.51 a barrel. US WTI prices have slid for four straight sessions, down 6 percent in that time. US crude inventories USOILC=ECI rose 1.9 million barrels last week, according to the US Energy Information Administration. [EIA/S] This was less than expected, but that was in part because of a surprising increase in refining activity that boosted fuel inventories headed into the seasonally slow spring. However, US crude production also rose, hitting 10.25 million barrels per day (bpd), a record if confirmed by more reliable monthly data, which lags by a couple of months. “US weekly oil production registering 10.25 million bpd in today’s report has unsettled the market – the impact of which is manifested as weakening oil prices,” said Abhishek Kumar, senior energy analyst at Interfax Global Gas Analytics in London. A recent rebound in drilling rig activity boosted production after futures prices extended a rally to three-year highs earlier this month. Higher output could undercut prices, analysts said, noting that official estimates for US production gains were recently increased. Hedge funds and other speculators had a record long position in crude futures as recently as late January. These positions have been trimmed, but are still largely arrayed in favor of rising oil prices. “Bullish sentiment that was built on OPEC cuts and geopolitical unrest is slowly fading away as recognition of US production surpassing 10 million bpd sinks in, which also puts Saudi Arabia and Russia at risk of losing further market share,” wrote analysts at Drillinginfo.com, in commentary after the EIA figures. Published in Daily Times, February 9th2018.