Brent Crude Rally Ends as IEA Forecasts Continued U.S. Output Growth
BEIJING – Benchmark Brent crude oil prices remained below $58 a barrel on Tuesday as the International Energy Agency (IEA) said the United States will remain the world’s top source of oil supply growth until to 2020, defying expectations of a more dramatic slowdown in shale output growth.
Brent crude slipped 71 cents, or 1.22 percent, to $57.63 by 0234 GMT (9.34 p.m. EST), ending a three-day rally. The benchmark gained more than 9 percent last week, its biggest weekly rise since February 2011.
Prices had received a boost on Monday after the release of a monthly report by the Organization of Petroleum Exporting Countries (OPEC), which showed an increased forecast for 2015 with demand rising to 29.2 million bpd (barrel per day), and a reduction in U.S. supply growth.
Meanwhile, the IEA report released on Tuesday predicted demand would rise to 29.4 million bpd this year, but said U.S. shale oil output growth would only pause amid the current price collapse before regaining momentum.
U.S. crude futures were also trading down 65 cents at $52.21 on Tuesday, snapping three days of gains, after a preliminary survey showed that U.S. commercial crude stockpiles likely hit a record high last week.
“Another report of strong builds in inventories in this week’s EIA market report could halt oil’s rally,” ANZ bank said on Monday, referring to the U.S. Energy Information Administration’s stockpiles data release due on Wednesday.
Elsewhere, a strike by security guards that closed Libya’s eastern oil port of Hariga, the country’s last functioning export port apart from two offshore fields, ended late on Monday.