Feb. 13 (UPI) -- An exuberant report on the pace of U.S. crude oil production growth sent crude oil prices lower to test multi-month lows in early Tuesday trading.
Oil prices staged a comeback on Monday, recovering some ground lost during last week's equities-fueled selloff. In the span of about a week, however, the price of oil lost all of its gains since the start of the year.
Crude oil prices rallied for most of January on mounting economic enthusiasm and geopolitical risk, largely shrugging off record-setting gains in U.S. oil production growth. A monthly market report from the International Energy Agency found that, for the three months ending in November, U.S. production "increased by a colossal 846,000 barrels per day."
Rising U.S. production from shale basins a few years ago prompted the Organization of Petroleum Exporting Countries to defend their market share with even more oil. That tilted the market heavily toward the supply side and OPEC, with support from Russia, is in its second year of trying to bring the market back to balance with coordinated production cuts.
That's supported crude oil prices and stimulated U.S. oil production even further.
"In 2018, fast rising production in non-OPEC countries, led by the United States, is likely to grow by more than demand," the IEA's report read. "For now, the upward momentum that drove the price of Brent crude oil to $70 per barrel has stalled."
The price for Brent crude oil was down 0.7 percent as of 9:20 a.m. EST to $62.16 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.94 percent to $58.73 per barrel.
Brent crude oil was last in this range in the middle of November.
The IEA's report found the overhang in the five-year average in crude oil inventories for the world's leading industrial economies was shrinking to the point of near-balance. A survey of analysts from commodity pricing group S&P Global Platts, however, revealed expectations of a 3 million barrel increase in U.S. crude oil stockpiles.
"Strong U.S. refinery activity this winter has kept crude stocks on pace to close the gap with the five-year average, though overall inventories remain high and domestic production keeps climbing," its emailed market report read.
Speaking to Platts, Russian Energy Minister Alexander Novak stuck to his theme that the balance between global supply and demand mattered more than the price of oil. Novak was among those supporting a second year of OPEC's balancing act, but cautioned about getting ahead of the market.
"My recommendation is to assess the market in the longer term and avoid knee-jerk reactions," he was quoted as saying.