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Oil prices dip on relentless rise in U.S. crude output

Reuters  |  SINGAPORE 

By Gloystein

(Reuters) - Oil prices dipped on Tuesday, extending losses from the previous session, as the inexorable rise in U.S. crude output weighed on markets.

U.S. Intermediate (WTI) crude futures were at $61.18 a barrel at 0747 GMT, down 18 cents, or 0.3 percent, from their previous close.

Brent crude futures were at $64.77 per barrel, down 18 cents, or 0.3 percent.

Both crude benchmarks dropped by around 1 percent in their Monday sessions.

"Oil prices fell on the back of concerns that surging U.S. production ... could push inventories in the U.S. higher," said on Tuesday.

Healthy demand and ongoing supply restraint by a group or producers led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, however, are preventing further price falls.

But in a sign that an early-year rally in has fizzled out, money managers cut their combined net long positions in the six most important futures and options contracts linked to petroleum prices by 50 million barrels in the week to March 6.

Scaring off traders betting on further price increases has been a relentless rise in U.S. production, which soared past 10 million barrels per day (bpd) in late 2017, overtaking output by top exporter

U.S. production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russia, according to the

"Oil prices pulled back yesterday as basic fundamentals of oversupply continued to worry the markets," said Sukrit Vijayakar, director of Trifecta in a note.

The rising U.S. output comes largely on the back of

U.S. crude production from major shale formations is expected to rise by 131,000 bpd in April from the previous month to a record 6.95 million bpd, the (EIA) said in a monthly report on Monday.

"Oil prices moved lower ... after (the) Energy Information Administration published a report that crude production from seven plays is expected to see a climb," said Stephen Innes, head of trading for Asia/Pacific at in

That expected increase would top the 105,000 bpd climb in March from the previous month, to what was then expected to be a record high of 6.82 million bpd, the EIA said.

The EIA is due to publish its latest weekly U.S. production data on Wednesday.

(Reporting by Gloystein; Editing by and Tom Hogue)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 13:21 IST
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