Crude oil has dropped from its five-week high due to surge in US shale production, which negated concerns over increased tensions in the Middle East and OPEC’s output-cut deal.
Brent crude futures LCOc1 slipped by 20 cents to touch at $55.78 per barrel while US West Texas Intermediate (WTI) CLc1 lost 15 cents to get traded at $52.93 a barrel, reported Reuters.
Earlier, US Government data showed that US crude stocks touched record highs in the recent weeks due to an increase in drilling activity.
Storage hubs at Cushing, Oklahoma, and in the Gulf Coast of US stocked record inventory.
The oil market witnessed an increase in crude prices recently due to conflicts in the Middle East that disrupted oil production.
Libya’s Sharara oilfield shutdown production after a group blocked a pipeline that transports crude to the oil terminal.
The missile attack by US on Syrian air base had further affected Middle East production.
Now, investors are eyeing the upcoming US summer season that would drive demand and further improve oil prices.
Trading data in Thomson Reuters Eikon found that this year oil supply has been higher than demand despite the ongoing OPEC output cuts.
Currently, OPEC members along with some non-OPEC nations pledged to reduce oil production by 1.8 million barrels per day for the first six months of this year to support prices.