Oil prices tumbled on Tuesday to resume their losses, which were temporarily halted yesterday as recovery from low levels came amid strong prospects for OPEC and Russia to gradually increase production and end the global supply reduction deal, while US production is accelerating to new record highs.
By 10:25 GMT, US crude dropped to $ 64.95 per barrel from the opening level of $ 65.86, recording a high of $ 65.86 and a low of $ 64.84.
Brent crude fell to $ 74.85 per barrel from the opening price of $ 75.22 and recorded a high of $ 75.29 and a low of $ 74.53.
US crude oil yesterday rose 2.3%, recovering from a two-month low of $ 63.58 a barrel earlier in the session, and Brent contracts rose 3.3%, the first gain in three days, recovering from the lowest level in seven Weeks of $ 72.44 a barrel.
Oil chart
Goldman Sachs Group said the oil market is still suffering from the deficit, which requires more production from OPEC and Russia to avoid the implementation of stocks by the end of this year.
The group expects OPEC and Russian production to rise by 1.3 million barrels by the end of 2018 and by 0.5 million barrels in the first half of 2019.
Oil prices lost 1.9 percent last week, the fourth weekly loss in a row, on fears of increased production in the world’s top three oil producers, Russia, the United States and Saudi Arabia.
The Organization of the Petroleum Exporting Countries (OPEC) and some independent producers are due to meet on Friday in Vienna to determine production policy and make a final decision on the global supply reduction agreement.
Saudi Arabia, the world’s largest producer, and Russia, the non-member country of the world body, have proposed a gradual increase in production, while Iraq, Venezuela, Algeria and Iran oppose the move.
OPEC and independent producers are currently implementing a global deal to cut production by 1.8 million barrels and the deal is due to expire in December.
In the United States, the platforms increased last week for the fourth week in a row, bringing the total currently operating platforms to 863 platforms, the highest level since March 2015.
Thanks to high drilling activities, US production has jumped more than 29 percent since mid-2016 to a total of 10.90 million barrels, surpassing Saudi Arabia’s stable output of around 10 million barrels and close to Russia’s largest oil producer of around 11.1 million barrels.