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Oil prices sank in Asia today on concerns about unrelenting global production levels despite lofty supplies, analysts said.
US benchmark West Texas Intermediate crude for June delivery fell 15 cents to $59.73, while Brent crude for July delivery fell six cents to $66.64 in late-morning trade.
Nicholas Teo, market analyst at CMC Markets in Singapore, said prices “faltered” after the International Energy Agency (IEA) said slowing US shale oil output was being offset by higher production elsewhere.
Teo said higher output by the OPEC cartel indicated it is “winning the price war by taking market share back from the Americans.’’
He added: “Although oil could trade in a wide range for some time, the market share war doesn’t appear to be ending.”
OPEC production
Oil prices plummeted more than 60 per cent between June and January as the Organisation of the Petroleum Exporting Countries refused to cut production despite a global glut.
The move by the cartel, which pumps about 30 per cent of global crude, was widely taken as trying to push US shale producers, which have higher costs, out of the market.
Oil supplies from leading OPEC producers Saudi Arabia, Kuwait and the United Arab Emirates are near their highest levels in three decades, the IEA had said in a monthly report Wednesday.
OPEC is scheduled to meet in Vienna on June 5 to discuss its collective output level, currently at 30 million barrels per day.
Analysts said dealers are also keeping an eye on civil strife in Libya and Yemen, with concerns that the fighting may supplies in the crude-rich West Asia.
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