Singapore — Crude oil futures were lower during mid-morning trade in Asia Tuesday, continuing the downtrend from the overnight slide as investors remained concerned about growing supply amid poor demand.
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At 10:40 am Singapore time (0240 GMT), ICE February Brent crude futures were down 63 cents/b (1.06%) from Monday's settle to $58.98/b, while the NYMEX January light sweet crude contract was 51 cents/b (1.02%) lower at $49.37/b.
The US Energy Information Administration on Monday increased its projection for US shale production in January -- to rise by 134,000 b/d to 8.166 million b/d.
January's expected growth is one of the more robust monthly increases of late. In November, EIA predicted December's oil output would be 7.944 million b/d, an increase of 113,000 b/d month on month.
"Crude oil futures succumbed to bearish influences as investors weigh rising US shale production levels along with weaker economic prospects beyond 2018," Benjamin Lu, investment analyst at Phillip Futures, said.
Meanwhile, a mixed expectation on last week's US crude inventory levels also weighed on prices, analysts said.
Analysts surveyed Monday by S&P Global Platts expect US commercial crude stocks to have fallen 3 million barrels last week amid a 0.3 percentage point increase in refinery run rates.
While a draw would certainly be welcome by many market bulls, a decline of this size would put stocks at 439 million barrels, keeping them steady at a 6.33% surplus to the five-year average of EIA data.
Counter to survey respondents, S&P Global Platts Analytics expects US crude stocks to rise by 3 million barrels amid a rise in US production and a decline in exports.
Definitive numbers on last week's US stock data are due for release from the US EIA later Wednesday.
Ongoing trade tensions between the US and China, uncertainty around temporary waivers on Iranian exports and a poor equities market have also been instrumental in pressuring prices lower, analysts said.
"Investors also remained concerned that OPEC will struggle to keep to its agreement to reduce output. This is likely to see prices remain under pressure until there is evidence that output is being cut," ANZ analysts said in a note Tuesday.
As of 0240 GMT, the US Dollar Index was down 0.58% at 96.55.
--Avantika Ramesh, firstname.lastname@example.org
--Edited by Geetha Narayanasamy, email@example.com