LONDON: Oil prices were on track Friday for weekly declines as surging US output countered production losses in sanctions-hit Iran and Venezuela.
Brent crude oil futures were at $70.71 a barrel at 1344 GMT, down 4 cents and set for their first weekly loss after five weeks of gains.
US West Texas Intermediate (WTI) crude futures were up 2 cents at $61.83, poised for a second straight weekly decline.
"Even with deep losses in supply from Iran and Venezuela, as well as a few other countries around the world, OPEC+ will still need to hold back production to balance the market," SEB analyst Bjarne Schieldrop said in a note. The supply reflected output growth in the United States, he said.
US crude oil production reached a record 12.3 million barrels per day last week, rising by about 2 million bpd over the past year.
Exports of US crude broke through 3 million bpd in November for the first time and hit a record 3.6 million bpd earlier this year, according to data from the Energy Information Administration.
Rising US oil production has helped to offset some of the disruption caused by US sanctions against Iran and Venezuela and supply cuts led by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.
Production from Saudi Arabia could edge higher in June to meet domestic demand for power generation, though output will remain within its quota in the supply pact, sources familiar with the kingdom's policy said.
The world's top crude exporter is expected to produce about 10 million bpd in May, slightly higher than in April but still below its 10.3 million bpd quota under the OPEC-led deal, industry sources said.
Traders said that prices were also put under pressure by Russia's pumping clean oil through the Druzhba pipeline towards western Europe again, after several countries halted imports last week because of contamination.
Poland, Hungary and the Czech Republic are offering their domestic refiners about 8 million barrels of oil from strategic reserves after supplies from the Druzhba pipeline were halted, industry sources said on Friday.
In the United States, analysts say supply will rise further as its export infrastructure is improved.
"One of the things that we can see in the near future is the de-bottlenecking of the Permian basin in the US through new pipelines and export capacity," said Will Hobbs, chief investment officer for Barclays Investment Solutions.
"This will connect the world's largest shale basin to the global oil market."
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