Investing.com – WTI crude oil prices settled lower on Tuesday as traders appeared to unwind some their bullish bets on oil amid growing fears that domestic oil supplies could rise for the first time in eleven-weeks.
On the New York Mercantile Exchange for March delivery fell 1.6% to settle at $64.50 a barrel, while on London’s Intercontinental Exchange, lost 0.49% to trade at $69.12 a barrel.
Concerns over a potential rise in US oil supplies come as traders fear that narrowing spreads between WTI crude and Brent may have dampened demand for US crude exports, leading to a build in crude stockpiles.
Also adding to negative sentiment on oil prices were expectations that US crude production could soon hit an unprecedented 10 million barrels per day (bpd) as the number of oil rigs rose sharply last week, pointing to a potential ramp up in production.
US crude production reached 9.88 million barrels a day last week, the highest since 1983, according to the Energy Information Administration.
Offsetting the rise in US production has been ongoing production curbs from major oil producers – as part of the OPEC-led output cut agreement- and higher oil demand growth amid strong global economic momentum. Yet, some fear that the rise in US oil production may dampen OPEC and other major oil producers’ resolve to remain in strong compliance with the accord to curb output.
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.
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