Oil eases as rising United States output puts pressure on prices

Oil prices stable after two-day decline but rising U.S. output drags

Latest US oil production data will be released on Wednesday.

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014.

The rising USA output comes largely on the back of onshore shale oil production.

US West Texas Intermediate (WTI) crude futures were at $62.22 a barrel up 18 cents, or 0.3 per cent while Brent crude futures were at $65.70 per barrel, up 21 cents, or 0.3 per cent, from their previous close.

May WTI Crude Oil settled at $61.33, down $0.59 or -0.95% and June Brent Crude Oil finished the session at $64.79, down $0.48 or -0.74%.

Production from shale regions will reach 6.95 MMbopd next month, the U.S. Energy Information Administration said in its monthly drilling report.

Refinery crude runs rose by 85,000 barrels per day (bpd), API data showed.

While the U.S.is now pumping more than 10 million barrels a day, surpassing a record set in 1970, that boom is being accompanied by a surge in overseas shipments, helping drain stockpiles at the nation's largest storage hub.

The crude outputs are looking to take another miserable turn as the U.S. daily reports may climb to levels similar to what they were producing a year ago.

New indications of growing US output come as the Organization of the Petroleum Exporting Countries-which has been holding back output by 1.8 million barrels a day since the start of last year-is divided over how high the price of oil should be.

Official weekly US crude production and inventory figures will be published by the Energy Information Administration (EIA) later on Wednesday.

In Libya, the Zawiya oil terminal returned to normal operations late on Tuesday after workers who were blocking ships from docking ended a strike, two sources said.

Meanwhile, the International Energy Agency said last week it expects the U.S.to overtake Russian Federation as the world's largest oil producer by 2023, with output rising to 12.1 million barrels a day.

While a brighter economic outlook has underpinned demand expectations, expanding American production remains a challenge to the Organization of Petroleum Exporting Countries and its allies, which are trying to prop up prices via output curbs.

While the producer group complied with a pledge to curb output and ease a glut in 2017, USA flows that are gaining a bigger slice of the prized Asian market may prompt some nations to boost supplies, said Warren Patterson, a commodities strategist at the Dutch bank.

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