Oil prices take a dip with an increase in US Shale drilling

Prices for oil in the international markets eased up on Monday. The prices of oil in the international markets took a dip on rumors of a significant increase in oil output from the US Shale industry. Despite that, the markets have been relatively buoyant on the expectation of extension in OEPC-led supply cuts on 30th of November.

U.S. West Texas Intermediate (WTI) crude futures were at $58.68 a barrel at 0436 GMT, down 27 cents, or 0.5 percent, from their last settlement.

Brent crude futures fell just 4 cents to $63.82 a barrel.

On the crude production front, US crude production is up by 15 percent since mid-2016, with the number of rigs increasing for first time since July. WTI touched $59.05 on Friday partly because of the closure of 590,000 bpd Keystone Pipeline connecting Canada’s oil sands to United States. The pipeline was closed off after a spill was detected in one of the region it passes from.

In global markets, OPEC is all set to announce extension of cuts beyond March 2018 as it sees the cap on output working in favor of oil prices. Since the oil cartel announced cap on oil output last year, the prices of oil have jumped to reach $59 partly fueled by geopolitical tensions and an increase in demand.

However, uncertainty looms over the cuts issue as Russia continues to signal non-compliance after some of the Russian Minsters said that they are more than comfortable to operate at the current benchmark prices.