Oil rescued from price lows by Libyan supply disruption

Oil rescued from price lows by Libyan supply disruption

Oil prices fell on Tuesday, extending falls from the previous day, as the relentless rise in U.S. crude output weighed on markets.

"The ever-expanding US supply continues to pose significant downside risk to oil prices", said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore. The futures on U.S. crude oil with delivery in April fell by 0.20% to 61.24 Dollars per barrel. Both oil varieties lost about 1% of their value on Monday.

"Meanwhile, the EIA confirmed, or possibly made worse, what we already knew about USA shale output, which is relentlessly marching higher".

United States production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russian Federation, according to the International Energy Agency (IEA).

After the USA boosted rigs drilling for oil for six straight weeks, American explorers idled four rigs last week, easing fears over surging shale production.

The EIA last week also raised its production estimate for the full year, saying it expects total USA crude production to rise by 1.4 million barrels a day in 2018.

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US crude production, pushed up largely by shale oil drilling, is expected to rise above 11 million bpd by late 2018, taking the top spot from Russian Federation, according to the International Energy Agency (IEA).

The Organisation of the Petroleum Exporting Countries (Opec), with a group of other producers led by Russian Federation, has been withholding production since the start of 2017 to prop up prices. Total output should now average 10.7 million barrels a day this year, up from a previous forecast of 10.6 million barrels a day.

"Thus OPEC has no scope to expand production from its current level".

Brent crude futures-where Nigeria's oil is pegged-sold at $64.77 per barrel, down 18 cents, or 0.3 percent.

According to energy services firm Baker Hughes, U.S. energy companies last week cut oil rigs for the first time in nearly two months, with drillers cutting back four rigs, to 796.

"The ever-expanding US supply continues to pose significant downside risk to oil prices", said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore. Meanwhile, stockpiles at Cushing, Oklahoma, the delivery point for WTI futures, are forecast to have been little changed after 11 straight weeks of declines.

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