Oil eases from five-week high, rising U.S. production weighs
Crude oil eased from a five-week high on Tuesday as rising U.S. shale oil production offset concerns over geopolitical tensions in the Middle East and output cuts being made to support prices.
The international benchmark for oil prices, Brent crude futures LCOc1 were down 20 cents from its previous close at $55.78 per barrel at 0702 GMT. Earlier, Brent had climbed to its highest since March 7 at $56.16 a barrel.
U.S. West Texas Intermediate (WTI) CLc1 gave up 15 cents to $52.93 a barrel after having touched a five-week high of $53.23 a barrel. Brent has risen in each of the previous six sessions while WTI gained for the last five days.
U.S. crude inventories have touched record highs at both the U.S. storage hub of Cushing, Oklahoma and in the U.S. Gulf Coast in recent weeks, according to U.S. government data.
But the market had been pushed higher by tensions following a U.S. missile strike on Syria and a another shutdown at Libya’s largest oilfield.
Libya’s Sharara oilfield was shut on Sunday after a group blocked a pipeline linking it to an oil terminal, a Libyan oil source said. The field had only just returned to production after a week-long stoppage ending in early April.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers have pledged to cut output by 1.8 million barrels per day in the first six months of 2017, to get rid of excess supply.
But trading data in Thomson Reuters Eikon shows that for the majority of 2017 supplies have been exceeding demand despite the OPEC and non-OPEC supply cuts.
Source : Reuters