Crude oil edged back from a five-week high on Tuesday, as rising US shale oil production weighed against support from tensions in the Middle East and production cuts led by members of the Organization of the Petroleum Exporting Countries (OPEC) and other states.
Brent crude, the international benchmark for oil, was down 8 cents from its previous close at $55.90 per barrel at 1225 GMT. Earlier in the session, Brent had climbed to its highest since March 7 at $56.16 a barrel.
US West Texas Intermediate (WTI) fell by 9 cents to $52.99 a barrel, after touching 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.
“We are getting into the high-risk part of this rally. It has been going on for a long time,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
“I would not be surprised to see a bit of book squaring going on now, ahead of the US inventory data which is due on Thursday morning Asia time,” he said, also noting that current prices have attracted shale oil producers in the past.
US crude inventories have touched record highs at both the US storage hub of Cushing, Oklahoma and in the US Gulf Coast in recent weeks, according to US government data.
A Reuters poll of analysts forecast a rise in US crude inventories for a fourth straight week. Russian Energy Minister Alexander Novak said his country’s output cuts would reach 250,000 barrels per day (bpd) by mid-April, TASS news agency reported. Another shutdown at Libya’s largest field Sharara also kept oil off the market.
Russia was part of a deal between OPEC and other producing countries to cut output by 1.8 million bpd in the first six months of 2017.
“We have seen quite an encouraging market,” said Tamas Varga, an analyst with PVM Oil Associates, adding Tuesday’s dip in prices looked like a temporary pause. “This market should be going higher.”

Source: Arab News