- Oil prices dipped slightly in early trading on Tuesday after posting strong gains the previous session on the back of an expected drop in U.S. production, but which analysts expect to be countered by rising output from Iran.
- U.S. front-month West Texas Intermediate (WTI) crude futures, were trading at $33.10 per barrel at 0118 GMT (8.18 p.m. ET), down 29 cents from their last settlement. International benchmark Brent as down 21 cents at $34.48 a barrel.
- Tuesday’s dips came after strong gains in the previous session on the back of an expected fall in U.S. oil production this year.
- Production of shale oil is expected to drop by 600,000 barrels per day (bpd) this year and a further 200,000 bpd in 2017, according to the International Energy Agency (IEA).
- Yet analysts said that the gains were part-reversed by the prospect that rising Iranian production following the end of international sanctions, which will prolong oversupply. Currently 1-2 million of barrels of crude is produced every day in excess of demand.
- “Crude supply growth from Iran will more than compensate for any decline in U.S. output,” ANZ said.