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Crude-oil prices on Tuesday prices declined slightly after a report from the International Energy Agency indicated that crude output from non-OPEC members is set to exceed global demand this year.
The IEA said an inundation of the market from outside of the Organization of the Petroleum Exporting Countries, mostly driven by shale-oil producers in the U.S., might resemble a period back in 2014, when ballooning production capsized crude prices.
“Market conditions in early 2018 seem to be reminiscent of the first wave of U.S. shale growth, prompting the IEA to warn history could be repeating itself,” wrote Robert Yawger, director of energy at Mizuho in a Tuesday research note.
March West Texas Intermediate crude CLH8, -0.94% fell 19 cents, or 0.3%, at $59.10 a barrel near its intrasession low at $58.87. Meanwhile, April Brent crude LCOJ8, -0.62% —the global benchmark—slipped 7 cents, or about 0.1%, to $63.53 a barrel.
lthough Monday’s session ended slightly higher for oil futures, the day was marred by heightened concerns about output increases.
Indeed in the previous session, the U.S. Energy Information Administration said shale crude-oil production from seven major U.S. oil regions is expected to see a monthly climb of 110,000 barrels a day in March to 6.756 million barrels a day.
That report was released about a half-hour before crude contracts closed on Monday and combined with recent reports from OPEC signaling similar expectations for increased output, helped to pare earlier oil gains.
The OPEC-led plan, which the participants agreed to extend through the end of this year, helped to boost Brent by more than 50% in the second half of 2017 to around $70 a barrel, even as the price rise motivated shale producers in the U.S. to ramp up production.
—Christopher Alessi contributed to this article