Oil prices have fallen after US crude touched nearly two-year highs yesterday due to the shutdown of the Keystone pipeline and a drop in American fuel stocks.

Brent crude futures LCOc1 dropped 15 cents to $63.17 a barrel, while the US West Texas Intermediate (WTI) crude futures slipped 13 cents to $57.89 a barrel, reported Reuters.

Yesterday, the US WTI price touched $58.02 a barrel, the highest since July 2015.

Rising prices of US WTI were primarily driven by the shutdown of the 590,000bpd Keystone pipeline, which supplies crude from Canada to the US.

The TransCanada-operated pipeline closed in the last week following an oil spill in South Dakota. It connects Canada’s Alberta oilfields to the US refineries.

“Rising prices of US WTI were primarily driven by the shutdown of the 590,000bpd Keystone pipeline.”

TransCanada has decided to cut deliveries through at least the end of the month.

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By GlobalData

The market was also supported by the fall in US inventories that dropped by 1.9 million barrels in the week to 17 November to 457.14 million barrels.

However, the US oil output since the middle of last year has increased by nearly 15% to touch 9.66 million bpd, making it the third largest producer after Saudi Arabia and Russia.

The global oil market is also tightening due to the continued efforts by the OPEC and a group of non-OPEC nations, who have agreed to cut oil supplies to rebalance the market.

The agreed deal will expire in March 2018, but OPEC will meet on 30 November to discuss a possible extension of the policy.