United States oil output to surpass record earlier than expected

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WTI crude reached its highest level since December 2014, underpinned by OPEC-led production cuts and expectations of another draw in USA crude inventories.

Despite the rising production, oil prices edged higher on Tuesday, with USA crude touching its highest since December 2014, closing at $62.96 a barrel.

EIA collects and publishes data every Monday on retail gasoline and diesel fuel prices for 10 cities, nine states, five regions, and the United States as a whole.

Crude inventories fell by 4.9 million barrels in the week to January 5, compared with analysts' expectations for a fall of 3.9 million barrels. Refinery utilization rates fell by 1.4 percentage points.

However, U.S. production dropped sharply, though those figures are not considered as reliable as monthly data, which is released with a lag. Regional summer price spikes can not be precisely predicted.The agency expects gasoline demand in 2018 to total about 9.3 million barrels a day this year, a level that would surpass all-time records set last year.

Crude oil prices continued to soar Wednesday, as industry data showed another surprisingly large drawdown in US oil inventories.

US crude futures were trading 22 cents to $63.19 a barrel as of 10:49 a.m. EST (1549 GMT), while Brent rose 14 cents to $68.95 a barrel.

"Refiners should be concerned with the continued increase in gasoline and distillate inventories, which will pressure refining margins", said Andrew Lipow, president of Lipow Oil Associates in Houston.

February WTI Crude Oil settled at $62.96, up $1.23 or +1.99% and March Brent Crude Oil finished the session at $68.82, up $1.04 or +1.53%. Analysts had expected a smaller, 2.625-million-barrel build.

The market was supported by OPEC-led production cuts and expectations that USA crude inventories have dropped for an eighth week.

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