Oil prices fell to a one-week low on Friday, as a leading energy monitor predicted U.S. crude production would hit a high this year, surpassing output from Saudi Arabia and rivaling that of Russia.
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Light, sweet crude for February delivery fell 58 cents, or 0.9%, to $63.37 a barrel on the New York Mercantile Exchange, its lowest settle value since Jan. 9. Brent, the global benchmark, lost 70 cents, or 1%, to $68.61 a barrel.
Rising U.S. crude could dent a rally that has pushed oil up by 50% since June 2017 lows, in large part because of the belief that the glut in supply was easing.
But, as the price has risen, nimble U.S. shale producers have pumped more oil. U.S. crude output is expected to climb above 10 million barrels a day, a level last hit in 1970, the International Energy Agency said Friday in its closely watched monthly oil-market report.
U.S. crude production for the week ending Jan. 12 rose by 258,000 barrels a day, to 9.75 million barrels a day, according to data released this week by the U.S. Energy Information Administration.
"There's a slight turn in sentiment and a realization that non-OPEC production is going to grow strongly this year," said Caroline Bain, chief commodities economist at Capital Economics, on the oil market's shift downward.
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Ms. Bain said that an uptick in output at the end of last year by the Organization of the Petroleum Exporting Countries also weighed on prices. In its monthly oil-market report, the cartel said Thursday that its production rose by 42,000 barrels a day in December, to average 32.42 million barrels a day.
OPEC and 10 producers outside the cartel, including Russia, agreed late last year to extend a deal to curb crude output in a bid to rein in a global supply glut and boost prices.
OPEC's compliance with the cuts averaged 95% throughout 2017, according to the IEA report.
The price of Brent closed above $70 a barrel this week for the first time in over three years. But rising prices have also given shale producers an incentive to ramp up production, analysts say.
In addition to the OPEC cuts, prices have been buoyed by rising geopolitical threats to global supply and by pipeline disruptions.
Gasoline futures fell 1.1%, to $1.8636 a gallon, and diesel futures fell 0.2%, to $2.0584 a gallon.
--Stephanie Yang contributed to this article.
Write to Christopher Alessi at email@example.com
(END) Dow Jones Newswires
January 19, 2018 17:40 ET (22:40 GMT)