Relentless growth in US crude production continues to impact oil prices as markets witnessed a further fall on Tuesday.
US West Texas Intermediate (WTI) crude futures declined 18 cents, or 0.3%, to touch $61.18 a barrel, according to Reuters.
Brent crude futures, the international benchmark, slipped 18 cents, or 0.3%, to trade at $64.77 per barrel.
ANZ bank was quoted by the news agency as saying: “Oil prices fell on the back of concerns that, surging US production, could push inventories in the US higher.”
Despite the fall, ‘healthy’ demand, as showcased by the less than expected increase in the US crude inventories C-STK-EIA last week, and ongoing output cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and Russia continue to support oil prices.
Traders fear the effect of US production on oil prices, with output crossing the levels produced by Saudi Arabia.
Based on estimates given by the International Energy Agency (IEA), US output is projected to breach the 11 million barrels per day (bpd) later this year.
Energy consultancy Trifecta director Sukrit Vijayakar was quoted by the news agency, as saying in a note: “Oil prices pulled back yesterday as basic fundamentals of oversupply continued to worry the markets.”
In its monthly report, which was released on Monday, the US Energy Information Administration (EIA) stated that US crude output from major shale formations is expected to climb 131,000bpd next month to 6.95 million barrels per day.