USA crude slips 57 cents, retreating from mid-2015 highs

"Members of the Organization of the Petroleum Exporting Countries are not keen on increased Brent crude prices above $60 a barrel because of shale oil", Bijan Namdar Zanganeh said in comments on the ministry's news agency Shana.

On January 9, Brent crude futures were at $68.11 a barrel, 33 cents, or 0.5 percent, above their last close. U.S. West Texas Intermediate crude (WTI) gained 36 cents to $62.09 and reached its highest since May 2015 as well at $62.56.

Yet, surging USA production could offset some of the cuts from OPEC producers, as US production rose to 9.78 million barrels a day (MMBPD) in the latest week, according to last Wednesday's report.

Rising U.S. production is the main factor countering output cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries and by Russian Federation, which began in January a year ago and are set to last through 2018.

OPEC is cutting output by even more than it promised and the restraint is reducing oil stocks globally, a trend most visible in the United States, the world's largest and most transparent oil market. "We expect to see growth near 2 million barrels per day in 2018 and 1.3 million barrels per day in 2019".

"The fact that the crude benchmarks are establishing highest levels since spring of 2015 on very little fresh fundamental input continues to suggest a strong market underpinning", said Jim Ritterbusch, president of Ritterbusch & Associates, in a Tuesday note.

Crude oil futures continued to surge Tuesday on expectations the global oil market will soon re-balance.

According to the U.S. Energy Information Administration, global petroleum and other liquid fuel inventories fell on average for the first year since 2013 last year.

There is no sign yet that OPEC is prepared to relax its supply restraint.

However, some analysts believe market participants are getting to optimistic, especially given expectations for an increase in US shale production.

Rising U.S. production and weaker refined products demand weighed on the market, traders said.

The EIA forecast that USA crude oil production will average 10.3 million barrels per day in 2018 and 10.8 million barrels per day in 2019, breaking historical records for annual average production.

A senior OPEC source from a major Middle Eastern oil producer said on Monday OPEC would boost output only if there were significant and sustained production disruptions from Iran and Venezuela. "But for now, the bullish trend remains intact as prices remain above key supports".