Image credit: A/S Global Risk Management

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Oil production rose to a record of 11.346 mbpd, with the largest YoY output increase in U.S. history. Supply has surged by 2.1 mbpd from August 2017 to August 2018. This is the largest increase ever recorded, with data dating back to 1920. Shale drilling companies have boosted production as the rising oil prices have increased incentives for further production. New Mexico, Texas, and Colorado among other states have benefited hugely from the massive growth in the Permian Basin. The weekly oil inventory report showed a smaller-than-expected build in crude oil stocks (3.2 mio. barrels versus 4.1 mio. consensus), larger-than-expected draws in distillates and gasoline inventories (draw of 4 mio. and 3.1. mio. barrels respectively). It is the 6th week in a row of builds in crude oil stocks.

Huge oil producer Russia produced 11.37 million barrels per day in September and stated that it could increase production further as both Saudi Arabia and Russia have pledged to pump more oil to try to offset the declines in Venezuela and upcomin U.S. sanctions against Iran. Imports of Iranian crude oil by major buyers in Asia reached a 32-month low in September, as China, South Korea and Japan cut their purchases ahead of the U.S. sanctions - in an attempt to also avoid U.S. sanctions.

Overnight Chinese Caixin Manufacturing PMI data came out slightly above previous with 50.1. Later today, the UK central bank will be in focus with an interest rate decision and inflation report followed by comments from Gov. Carney. Also, U.S. ISM Manufacturing PMI is published.