US oil prices drop on rising shale petroleum forecasts

U.S. oil prices eased in Asian trade on Tuesday after the International Energy Agency (IEA) forecast U.S. shale output to grow at about 1.4 million barrels per day by 2022.

U.S. West Texas Intermediate crude slipped four cents to $53.16 a barrel as of 0042 GMT after settling down 13 cents in the previous session.

Brent crude had yet to start trading but closed the previous session up 11 cents at $56.01 a barrel.

U.S. shale production would climb even if prices remain around $60 a barrel, the IEA said in its five-year oil 2017 market analysis released on Monday.

A rise to $80 a barrel could see shale oil production grow by 3 million barrels per day by 2022, the IEA said.

Oil demand will also rise over the coming five years, crossing the 100 million bpd level in 2019 and hitting 104 million bpd by 2022, driven entirely by emerging economies, the report added.

Concerns over rising U.S. shale oil output have been offsetting the impact of production cuts agreed by the Organisation of the Petroleum Exporting Countries (OPEC) and some non-OPEC members to curb a global crude oversupply.

Russia and Iraq said on Monday it was too early to discuss if the pact by OPEC and non-OPEC members should be extended beyond May.

“It will depend on oil prices and market stability. If OPEC decides cuts, then Iraq will cut,” Iraq oil minister, Jabbar Al-Luaibi, told Reuters at the CERAWeek energy conference in Houston.

Average oil prices are expected to be lower in the next ten months of this year than in January and February due to a recovery in U.S. drilling activity, Fitch Ratings said in a report on Monday.

The number of rigs in operation rose to the highest level since October 2015 last week, the seventh straight week rig numbers have risen, according to figures from Baker Hughes.

Source: Reuters