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OPEC oil price falls on relentless rise in US crude output

OPEC price declines
OPEC oil price falls on relentless rise in US crude output

The price of OPEC basket of fourteen crudes stood at 62.15 US dollars a barrel on Tuesday, compared with 62.53 US dollars a barrel on Monday, according to OPEC Secretariat calculations. 

Oil prices fell on Tuesday, extending falls from the previous day, as the relentless rise in US crude output weighed on markets, according to Reuters.

US West Texas Intermediate (WTI) crude futures were at 61.20 US dollars a barrel at 0122 GMT, down 16 cents, or 0.2 percent, from their previous close.

Brent crude futures were at 64.80 US dollars a barrel, down 15 cents, or 0.2 percent.

Both crude benchmarks dropped by around 1 percent the previous session.

“Oil prices fell on the back of concerns that surging US production ... could push inventories in the US higher,” ANZ bank said on Tuesday.

US crude oil production soared past 10 million barrels per day (bpd) in late 2017, overtaking output by top exporter Saudi Arabia.

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

The rising US output comes largely on the back of onshore shale oil production.

US crude production from major shale formations is expected to rise by 131,000 bpd in April from the previous month to a record high 6.95 million bpd, the US Energy Information Administration (EIA) said in a monthly productivity report on Monday.

That expected increase would top the 105,000 bpd climb in March from the previous month, to what was then expected to be a record high of 6.82 million bpd, the EIA said.

The EIA is due to publish its latest weekly US production data on Wednesday.

The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).