Oil prices retreated in early Asian trade on Tuesday, 4th July 2017 halting a run of eight straight days of gains on signs that a relentless rise in U.S. crude production is running out of steam. Brent crude futures fell 27 cents, or 0.5 percent, to $49.41 per barrel by 0354 GMT. U.S. West Texas Intermediate (WTI) crude futures were trading down 24 cents, or 0.5 percent, at $46.83 a barrel.
The falls came after both benchmarks recovered around 12 percent from their recent lows on June 21.
Many traders closed positions ahead of the U.S. Independence Day holiday on July 4, while Brent also faced technical resistance as it approached $50 per barrel, traders said. Despite this, market sentiment has shifted somewhat.
BMI said it expected Brent to average $54 per barrel in the second half of this year, and to average $55 a barrel in 2018. It expects WTI to average $51 in the second have of 2017 and to average $52 next year.
OPEC is leading a bid to tighten oil markets by pledging to hold back around 1.2 million barrels per day (bpd) in output between January this year and March 2018. Its efforts have been undermined by rising output from Libya and Nigeria, who are exempt from the cuts, which helped push the group’s June output to a 2017 high of 32.57 million bpd, about 820,000 bpd above its supply target.