Investing.com – Crude oil prices settled lower for a second straight day after the International Energy Agency’s gloomy monthly report stoked investor fears that rising US oil output would derail OPEC’s efforts to rebalance the market.
On the New York Mercantile Exchange crude futures for March delivery fell 0.17% to settle at $59.19 a barrel, while on London's Intercontinental Exchange, Brent gained 0.26% to trade at $62.74 a barrel.
Non-OPEC production, led by the US, is likely to grow by more than demand in 2018, according to a report from the International Energy Agency (IEA). The energy body warned, however, that the underlying oil market fundaments appeared “less supportive for prices” so far this year.
While the IEA raised its demand growth outlook to 1.4 million barrels of oil per day, investors were concerned with the energy watchdog’s bearish view on supply, warning that higher US oil production – expected soon to overtake that of Saudi Arabia – could reverse the trend of falling oil stockpiles.
“All the indicators that suggest continued fast growth in the US are in perfect alignment; rising prices leading, after a few months, to more drilling, more completions, more production, and more hedging," the IEA's report stated.
The IEA report echoed some of the findings observed in the OPEC monthly report released Monday, showing the oil cartel revised upward its estimate for non-OPEC output to a total of 59.26 million bpd this year, 320,000 bpd higher than its previous forecast.
The American Petroleum Institute weekly inventory report is slated for Tuesday after US markets close, while the EIA issues its supply totals Wednesday at 10:30 a.m. ET. US production is expected to be closely watched amid a recent surge in rig counts suggesting a ramp up in oil production.