Investing.com – Crude oil prices erased earlier gains on Tuesday, after the International Energy Agency forecast world crude supply could overtake demand this year.
The U.S. West Texas Intermediate crude March contract was down 78 cents or about 1.20% at $58.55 a barrel by 04:00 a.m. ET (08:00 GMT), off session highs of $59.73 and re-approaching Friday’s one-and-a-half month lows of $59.20.
Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London declined 51 cents or about 0.81% to $62.06 a barrel, near Fridays two-month trough of $61.77 after rising to $63.09 earlier in the day.
In a report on Tuesday, the IEA predicted that world crude supply could surpass demand this year, potentially undermining global supply cut efforts.
The IEA raised its forecast for oil demand growth in 2018 to 1.4 million barrels per day, from a previous projection of 1.3 million bpd.
The report came a day after OPEC said it expected world oil demand to climb by 1.59 million barrels per day (bpd) this year, an increase of 60,000 bpd from the previous forecast, reaching 98.6 million bpd.
OPEC also said the U.S. and other outside producers would boost supply by 1.4 million bpd this year, up 250,000 bpd from last month and the third consecutive rise from 870,000 bpd in November.
Because of non-OPEC production growth, oil markets will only return to a supply and demand balance “towards the end of this year,” according to the Organization.
Fears that rising U.S. output could dampen OPEC’s efforts to rid the market of excess supplies have been weighing in oil prices recently.
The producer group, along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
Elsewhere, gasoline futures dropped 0.65% to $1.669 a gallon, while natural gas futures rallied 3.25% to $2.634 per million British thermal units.