Crude oil futures fell on Wednesday as concerns about climbing U.S. shale production pushed prices to their lowest in about a week, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, February West Texas Intermediate crude fell $1.40, or 2.7%, to settle at $51.08 a barrel.
March Brent crude, the global benchmark, fell $1.55, or 2.8%, to end trading at $53.92 a barrel on London’s ICE Futures Exchange.
Both WTI and Brent crude logged their lowest finish since January 10.
In its report, OPEC reported higher prices for oil “may lead to a resurgence in U.S. tight oil production from the most prolific shale regions.”
The Energy Information Administration showed a forecast for an increase in U.S. shale oil production in February, with the largest rise likely to come from the Permian Basin, which covers parts of western Texas and southeastern New Mexico. That is where Exxon Mobil Corp. has said it plans to more than double its resources.
The EIA projected that shale oil production would increase to 4.75 million barrels a day in February. The body also raised its shale oil production numbers for January to 4.71 million barrels a day from 4.54 million.
“This confirms that U.S. shale oil production has bottomed out,” Commerzbank analysts said in a note. The shale ramp up will make it harder for OPEC to rebalance oil markets, they added.
Late Wednesday, the American Petroleum Institute will release its report on U.S. petroleum supplies, with the EIA’s weekly report following on Thursday morning. Both have been delayed by a day because of Monday’s holiday.
Meanwhile, February natural gas declined by 11 cents, or 3.2%, to $3.302 per million British thermal units on the New York Mercantile Exchange. An S&P Global Platts poll of analysts shows expectations for a weekly drop of 238 billion cubic feet.
