Oil prices have fallen after making early gains, yet prices continue to be supported by restricted supply and strong demand.
Brent crude futures LCOc1 were down 25 cents to stand at $68.90 a barrel, while US West Texas Intermediate (WTI) crude futures CLc1 were 10 cents down to touch $63.63 a barrel, reported Reuters.
PVM Oil Associates analyst in London Tamas Varga was quoted by the news agency as saying: “Currently, there is no reason to believe that there has been a significant change in the underlying fundamental sentiment and the sell-off is, so far, viewed as a technical correction.”
OPEC and Russia have been restricting production in the market since January last year, with output cuts continuing until the end of this year.
Output cuts have coincided with strong demand and economic growth, increasing prices by more than 50% since June 2017.
However, the oil market may see a fall in prices due to rising US production.
The US Energy Information Administration expected the country’s oil output to grow in February. Shale production is expected to increase by 111,000bpd to touch 6.55 million bpd, while US crude output C-OUT-T-EIA is likely to cross ten million bpd mark.