Oil prices were lower on Tuesday afternoon as investors feared that continued increases in U.S. output would negate OPEC’s efforts to buoy oil prices. Brent crude was down 0.32 percent as of 2:44 p.m. HK/SIN to $62.96 per barrel, while U.S. WTI crude futures were down 0.23 percent to $56.63 per barrel. The price reversal comes after both crude benchmarks hit 2015 highs last week.
On Monday the U.S. government announced that U.S. shale production would increase in December for the 12th consecutive month, adding 80,000 barrels per day, a move that could send prices below $60 per barrel. Thus far in 2017, the average Brent price was $54.5 per barrel.
Chinese refining also stands near record highs, the country’s statistics bureau announced on Tuesday, with October’s operations reflecting a 7.4 percent increase to 11.89 million barrels per day.
OPEC has increased its demand outlook for 2018, saying that the world will need 33.42 million barrels per day of OPEC crude. This forecast is 360,000 barrels per day higher than the organization’s original forecast. However, the International Energy Agency said on Tuesday that demand will be challenged by the influx of electric vehicles that is swarming the market, which is expected to rise from 50 million on the road in 2025 to 300 million electric vehicles on the road by 2040. Despite this prediction ,the IEA still predicts that oil prices will hover near $83 per barrel in the next 5-10 years.