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Oil dips on rising U.S. supplies, market still tense on conflict in Syria

Reuters  |  SINGAPORE 

By Gloystein

(Reuters) - Oil prices on Wednesday eased away from 2014 highs reached the previous session as escalating tensions were offset by increasing inventories and production in the

Brent crude futures fell to $70.80 per barrel at 0702 GMT, down 23 cents, or 0.3 percent, from their last close. Brent surged more than 3 percent on Tuesday to hit its highest level since late 2014, at $71.34 a barrel.

U.S. WTI crude futures were at $65.40 a barrel, down 11 cents, or 0.2 percent from their last settlement.

Markets have been tense on escalating tensions in the

The and its allies are considering air strikes against Syrian Bashar al-Assad's forces following a

Pan-European air traffic control agency said late on Tuesday that air-to-ground and/or cruise missiles could be used within the next 72 hours, warning of intermittent disruption of

Though is not a significant itself, the wider is the world's most important crude exporter and tension in the region tends to put on edge.

There are also concerns that the could renew sanctions against Iran, a major

"Oil prices are towering on the heightened tension in the Middle East," said Stephen Innes, head of trading for Asia/Pacific at in

Not all pointed to ongoing price rises, however.

U.S. crude inventories rose by 1.8 million barrels in the week to April 6 to 429.1 million, according to a report by the (API) on Tuesday, compared with analysts' expectations for a decrease of 189,000 barrels.

OANDA's Innes said the API report had "temporarily taken a bit of wind out of the market".

Adding to rising storage levels, the (EIA) said on Tuesday that it expects domestic production in 2019 to rise by more than previously expected, driven largely by growing U.S. shale output.

In its monthly short-term energy outlook, the agency forecast that U.S. output will rise by 750,000 barrels per day (bpd) to 11.44 million bpd next year. Last month, it expected a 570,000 bpd year-over-year increase to 11.27 million bpd.

That will likely make the the world's biggest by 2019, surpassing which currently pumps out almost 11 million bpd.

said on Wednesday that the world's biggest exporter of will not sit by and let another supply glut surface, implying that the of the cartel of the Organization of the Petroleum Exporting Countries (OPEC) would continue to withhold supply in order to tighten markets and prop up prices.

(Reporting by Gloystein; Editing by and Kenneth Maxwell)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, April 11 2018. 12:39 IST