Crude oil prices fell Tuesday from five-month highs as Russian comments signaled the possible easing of the Opec+ supply-cutting deal overcame concern violence in Libya could tighten global markets, Kallanish Energy reports.
A U.S. threat to place tariffs on hundreds of European goods and a downgrade by the International Monetary Fund in its global economic growth forecasts stopped a rally in global equities and also added to concerns a slowdown this year will hit fuel consumption and prevent crude prices from rising even higher.
U.S. West Texas Intermediate crude settled 42 cents lower Tuesday, at $63.98 a barrel, after hitting a high dating back to last November, at $64.79/Bbl.
Global benchmark Brent crude fell 49 cents, to $70.61/Bbl Tuesday, after earlier rising to $71.34/Bbl, also the highest since November.
Supply curbs led by Opec+, which includes most Opec members, along with a number of non-Opec producer-countries led by Russia, have underpinned a more than 30% rally this year for Brent crude, despite downward pressure from fears of an economic slowdown.
But Russia signaled Monday it wanted to raise output when it meets with Opec in May because of falling stockpiles.
On Tuesday, President Vladimir Putin said Russia did not support an uncontrollable rise in oil prices and that the current price suited Moscow, Reuters reported.
Russian Energy Minister Alexander Novak said there would be no need to extend the supply-cutting deal past June if the market was expected to be balanced in the second half of the year, Reuters reported.
U.S. sanctions on Iran and Venezuela have deepened the Opec+ supply cut, but concern has grown this week about the stability of Libyan output. The Opec member pumps roughly 1.1 million barrels per day (Mmbpd), just over 1% of global supply.
Rising U.S. crude production and inventories also weighed on the market. U.S. crude production was expected to rise 1.43 Mmbpd in 2019, to average 12.49 Mmbpd, the Energy Information Administration said Tuesday, up from its previous forecast for a 1.35 Mmbpd increase.
U.S. crude inventories were forecast to have risen 2.3 million barrels last week, the third straight weekly build.
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