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Oil prices fell yesterday after US crude production neared an unprecedented 12 million barrels per day and concern grew over weakening demand, particularly in light of the trade dispute between the United States and China. International Brent crude oil futures were down 52 cents, or nearly 1 percent, at $60,80 per barrel around 10:36 am.

US West Texas Intermediate crude futures fell 86 cents, or 1,6 percent, to $51,45 per barrel.

The price of oil has risen about 20 percent from the 18-month low registered in late December, but investors appear loath to push crude much higher without evidence that relations between Washington and Beijing are improving, analysts said.

“Brent needs to move past $62 before we can talk about $65,” BNP Paribas head of commodities Harry Tchilingurian told the Reuters Global Oil Forum.

“From there, the door will be open to target $70, (if) we do not have negative news emerging around US-China trade talks that caused high levels of angst and de-risking last December.”

Soaring US crude output, which neared a record 12 million bpd in early January, is fuelling some of the concern among traders and investors that growth in global supply this year will outpace demand.

Along with the surge in US crude output, exports from the United States are also rising, hitting a record 3,2 million bpd by the end of last year.

“Crude oil exports from the US have strongly increased during the last few years and the trend is expected to remain positive,” shipping brokerage Banchero Costa said in a note.

In response to the drop in price in the second half of last year, OPEC and non-members such as Russia and Oman will cut production by a joint 1,2 million bpd through the first six months of this year.

US output has climbed by 2,4 million bpd since January 2018 and stockpiles of crude and refined products have risen sharply, US Energy Information Administration data shows.

“While (US crude) inventories fell slightly more than expected (last week), there was a large build in gasoline inventories. This stoked fears of weak demand in the US,” ANZ Bank said in a note. — CNBC.