Forecast predicts two years of record U.S. oil production

Oil hits $68 on tighter market

The oil minister of Iran, OPEC's third-largest producer, said on Tuesday that the organisation's members were not keen on increased prices as such gains would encourage more shale production.

Brent crude futures were at $67.77 a barrel, up 15c or 0.2% from their last close.

U.S. West Texas Intermediate (WTI) crude futures ended Friday's session down 57 cents, or almost 1%, at $61.44 a barrel, falling from the $62.21 high reached the previous day, and last seen in May 2015.

Despite this, USA production is expected to break through 10-million barrels a day very soon, largely thanks to soaring output from shale drillers.

Rising US production is the main factor countering production cuts led by the Middle East dominated Organisation of the Petroleum Exporting Countries (Opec) and by Russian Federation, which began in January past year and are set to last through 2018.

OPEC has no formal target for oil prices. "We expect to see growth near 2 million barrels per day in 2018 and 1.3 million barrels per day in 2019".

Market bulls have also been buttressed by the Organization of the Petroleum Exporting Countries' continued compliance with a deal to cut crude production.

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.

USA crude production was forecast to climb by 970,000 barrels per day (bpd) in 2018 and rise another 580,000 bpd to 10.85 million bpd in 2019, the EIA said in a monthly report that provided the agency's first outlook for next year.

Rising U.S. production and weaker refined products demand weighed on the market, traders said. Only Russia and Saudi Arabia produce more.

"I am now on the lookout for bearish technical patterns to emerge on oil prices as I believe they will struggle to go north of $65-$75 per barrel given the above fundamental consideration", said Fawad Razaqzada, technical analyst for

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

However, Innes added that Middle East turmoil would remain a key focus for oil markets and had the potential to "send oil prices rocketing higher".