Investing.com - Oil prices pulled back from three-month highs on Wednesday as focus shifted to surging U.S. crude production and the market waited for the latest data on weekly U.S. inventories.
New York-traded West Texas Intermediate crude futures fell 26 cents, or 0.46%, to $56.19 a barrel by 7:36 AM ET (12:36 GMT), after touching $56.77 earlier, its highest level since November of last year.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded down 36 cents, or 0.54%, to $66.09, backing off of $68.83 reached on Monday which was also its highest since November.
U.S. crude output, which soared by more than 2 million barrels per day (bpd) in 2018 to a record 11.9 million bpd, is set to keep rising thanks to booming shale oil production, the Energy Information Administration (EIA) said on Tuesday in a monthly report. It said shale output will rise by some 84,000 bpd in March to a new record of 8.4 million bpd.
“Shale oil is setting new production records, threatening the Organization of Petroleum Exporting Countries with another showdown that could upend the market as U.S. crude prices cross $55 per barrel,” Investing.com analyst Barani Krishnan warned.
BNP Paribas shared a similar view, predicting a downturn in prices toward the end of the year.
“U.S. oil production growth, driven by shale, will be increasingly exported in greater volumes to international markets while the global economy is expected to witness a synchronized slowdown in growth,” the bank said.
Amid concerns over market rebalancing, attention is set to turn to weekly data on U.S. crude inventories.
The American Petroleum Institute will release its report later on Wednesday with official government data out a day later amid expectations for a build of 3.1 million barrels.
Thursday’s report from the EIA will also include the latest reading on U.S. production.
Both reports come out one day later than normal due to Monday's holiday.
In other energy trading, gasoline futures fell 0.24% to $1.5600 a gallon by 7:38 AM ET (12:38 GMT), while heating oil declined 0.40% to $1.9867 a gallon.
Lastly, natural gas futures rose 0.79% to $2.683 per million British thermal unit.
-- Reuters contributed to this report.