Oil prices fall on fears of rising production in the United States

Oil prices decline on Tuesday on growing concerns that the growth rate of supplies of raw materials on the world market this year will exceed the increase in demand due to the increase in shale production in the United States.

The cost of the April futures for Brent crude on the London ICE Futures exchange to 17:40 kV decreased by $0,54 (0,86%) to $62,05 per barrel.

Futures price for WTI crude oil for March on the new York Mercantile exchange (NYMEX) decreased by this time for $0,55 (0,93) – up to $58,74 per barrel.

The oil market proceeded to decline after the publication of the International energy Agency (IEA) review of the market situation and forecasts for the current year.

Read the news also on the website “Energoinform”

IEA raised the forecast of growth of oil demand in 2018 for 100 thousand barrels per day (b/d) – up to 1.4 million b/d. However, the rate of increase of demand will be lower than in 2017, when they amounted to 1.6 million b/d .

In addition, according to the IEA, oil production from non-OPEC this year will exceed growth in demand.

“New and revised data show a small improvement balance at the beginning of 2018, but the main message of last month, remains unchanged and very clear: in 2018, growing oil production in non-OPEC, led by the United States likely to grow faster than the demand”, – noted in the review of the IEA.

According to the forecast of the office of information in the field of energy (EIA) of the U.S. Department of energy, the production of shale oil family the largest companies in the country in March will increase to 6,756 million barrels per day. The estimate of production in February was revised to 6.65 million b/d from the previously expected of 6.55 million b/d.

The report, the IEA raised the question of whether that alone produced in the US shale oil may be enough to satisfy global demand, says analyst commodity markets at UBS Wealth Management Giovanni Taunovo.

“This opportunity is a problem for OPEC and other oil producers”, – quotes the expert MarketWatch.

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