Investing.com – Crude oil prices settled lower on Tuesday, as the North Sea Forties pipeline restarted offsetting support from potential supply disruptions in Iran amid ongoing anti-government protests.
On the New York Mercantile Exchange crude futures for February delivery fell 0.08% to settle at $60.37 a barrel, while on London's Intercontinental Exchange, Brent lost 0.42% to trade at $66.59 a barrel.
Crude oil prices started the year on a sour note as pipelines in the North Sea and Libya reopened offsetting gains on expectations unrest in Iran could spark supply disruptions.
The 450,000 barrel per day (bpd) capacity Forties pipeline system in the North Sea returned to full operations on Dec. 30 after an unplanned shutdown while a Libyan pipelined gradually returned to production after an explosion last week disrupted operations.
The restart of the Fourties pipeline weighed heavily on Brent crude, narrowing the Brent-WTI spread to its lowest in nearly two weeks.
The sharp rise in oil prices, however, has encouraged US shale oil producers to ramp up output raising fears US output could hit record highs of over 10 million bpd in the weeks ahead.
U.S. oil production averaged about 9.6 million barrels per day in 2017, rising 1.8% to 9.64 million barrels a day in October.
Sentiment on oil prices remained bullish despite fears over rising US production as data published by regulators and exchanges showed portfolio managers held a record 1.33 billion barrels of long positions in Brent, WTI, U.S. gasoline and U.S. heating oil during the week ending Dec. 26.
The recent rally in oil prices above the $60 barrel has been largely supported by the OPEC-led output cuts and expectations for growing global demand.
In November, OPEC agreed to extend joint production cuts with Russia of 1.8 million barrels per day through 2018.