Oil slips, as USA supply threatens to undermine OPEC cuts

US oil gas output could jump 25% by 2025

Prices also remained under pressure from this week's International Energy Agency (IEA) outlook for slower growth in global crude demand.

In a report released two days ago, the International Energy Agency (IEA) had projected that the United States will be the world's leading producer of oil and gas by 2025.

"The oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, surplus of 200,000 bpd in 2018".

"It's no surprise that US production has edged higher given the higher oil prices", said Barnabas Gan, an economist at Oversea-Chinese Banking Corp.in Singapore.

OPEC and other big producers including Russian Federation agreed a year ago to cut crude output by 1.8 million barrels per day (bpd) to try to bolster prices.

Traders said oil rises due to efforts led by the Organisation of Petroleum Exporting Countries (OPEC) to withhold oil production to tighten the market and prop up prices.

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In Abu Dhabi on Monday, the UAE Minister of Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei, said that oil producers were expected to unanimously extend a production cut accord later this month, but its duration was still under discussion.

As of 16:02 GMT, West Texas Intermediate crude oil futures were 1% lower at $55.17 a barrel on the ICE.

Oil prices have risen steadily over the past few months as the impact of supply cuts has drained inventories.

After hitting a 10-year low of less than $30 in January, down from a peak of more than $100 in mid-2014, oil prices have recently been hovering around the $55 mark.

Direct WTI-Brent competition in global markets has been another contributing factor to the price spread, EIA reported. "Although more infrastructure to export crude oil has been built recently, US exporters must still use smaller, less-economic vessels or complex shipping arrangements, which add to costs".

Between 2017 and 2040 the IEA estimates that more solar power capacity will be added globally each year than any other source of energy, with an annual average increase of almost 70 gigawatts.

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