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Oil prices declined today after the US announced its shale oil reserves have nearly doubled, while prices also came under pressure due to the possibility of a slowdown in Chinese demand.

Brent crude dropped by 28 cents at $103.67 a barrel, while US oil slipped by ten cents to $95.67, reported Reuters.

The US Government, in a report released on Monday, said that the estimated global reserves of oil in shale rock deposits will boost total world crude resources by 11%.

Oil production in the US has increased as new drilling techniques have opened up shale deposits across the country.

The Energy Information Administration (EIA) said that shale oil reserves have jumped to 58 billion barrels, up from 32 billion in 2011.

According to a Reuters survey of analysts, US commercial crude oil stockpiles increased last week on higher imports.

Oil prices also came under pressure due to weaker demand and a slowdown in the economy in China, where May exports were weak, and domestic activity struggled to gain momentum.

On Monday, the North Sea Buzzard oil field, which produces 200,000 barrels per day, resumed full production, adding to pressure on Brent prices.

South Sudan’s decision to continue oil supply, despite threats from Sudan to stop cross-border flows in a dispute over alleged support for rebels, also helped to keep a lid on prices.

Traders will now keep their focus on the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA), as both will release their respective monthly reports of global oil demand on Tuesday.


Image: The EIA’s report that shale oil reserves increased to 58 billion barrels in the US capped oil prices. Photo courtesy of freedigitalphotos.

Energy