SINGAPORE – Oil prices eased on Tuesday on expectations of another rise in U.S. stockpiles and as Saudi Arabia keeps output near record highs, but prices remained near a 2015-peak reached last week.
Crude prices have climbed around 18 percent since the start of April on speculation about falling U.S. output after the domestic oil rig count hit 2010 lows. They have also been supported by tension in the Middle East.
Still, U.S. commercial crude oil inventories are likely to have increased by 2.4 million barrels last week, marking a rise for the 15th consecutive week, a preliminary Reuters survey showed.
Brent crude for June delivery was down 17 cents at $63.28 by 0141 GMT, after settling flat on Monday.
U.S. crude for May delivery, which expires later in the day, was down 15 cents at $56.23 a barrel, after settling 64 cents higher.
U.S. Senator Lisa Murkowski said on Monday she would introduce legislation this year to allow U.S. crude exports, saying the Obama administration should not dare lift sanctions on Iran before scrapping the U.S. crude export ban.
Saudi oil minister Ali al-Naimi told Reuters in Seoul that the No. 1 crude exporter expected to produce at near record highs of around 10 million bpd in April.
Despite near record production, analysts warn that OPEC’s ability to cope with an unexpected surge in demand is diminishing fast.
“If the demand and non-OPEC supply responses to lower price are similar to what was experienced in the 1980s, the very low level of spare capacity carries a risk of a price spike in the not too distant future,” said analysts at PIRA Energy.
OPEC’s spare capacity could halve to as low as 1.7 million barrels per day (bpd) this year, much below the more than 10 million bpd in the 1980s, when Saudi Arabia last opted for market share over price.
(Reporting by Jacob Gronholt-Pedersen; Editing by Joseph Radford)
This article was from Reuters and was legally licensed through the NewsCred publisher network.