Oil prices slipped on Wednesday as analysts warned of an intermediate correction in prices after fears of overbuying surfaced from the international investors. Oil prices have gained more than 13% during the last month alone.
The slippage had much to do with the rising US production as it continues to pose a major threat to the international oil prices. The prices on the other hand have been supported by the curbs in production coupled with strong global demand.
Brent crude futures were at $69.07 a barrel at 0441 GMT, down from a high of $69.37 earlier in the day and 18 cents below their last close.
Brent on Monday rose to $70.37 a barrel, its highest since December 2014, which was the beginning of a three-year oil price slump.
U.S. West Texas Intermediate (WTI) crude futures were at $63.68 a barrel, down 5 cents from their last settlement. WTI rose to $64.89 on Tuesday, also the highest since December 2014.
Analyst warn that the correction in the oil prices is imminent as the major underlying factors contributing to the raise in Brent prices have played out. The lurking tensions in the Middle East (Kurdish Iraq stand-off, Qatari tensions) have not led to any major supply disruptions.
Overall, the market looks extremely well supported barring the rising US Production, with no risks of a steep decline during the coming few weeks. The market could go through a 2-3% intermediate correction.
