Oil prices fell on Tuesday as lower production by the Organization of the Petroleum Exporting Countries (OPEC) and other exporters was undermined by growing evidence of a revival in US shale production and sluggish demand.
Benchmark Brent crude was down 70 cents at $55.02 a barrel by 1430 GMT. 
On Monday, the Brent futures contract closed down $1.09 a barrel. US crude was 75 cents lower at $52.26 after closing down 82 cents on Monday.
Prices have been supported over the last two months by efforts by OPEC and other exporters to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2017.
But while OPEC and Russia have together cut at least 1.1 million bpd so far, rising US production, as well as signs of slowing demand growth, threaten to undermine these efforts.
“The general perception is that OPEC is cutting production, which is supporting prices, but high stock levels, rising rig counts and growing US production are capping gains,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.
Societe Generale oil analyst Michael Wittner said US shale oil output was recovering faster than expected as more oil rigs drilled better and more efficient wells more quickly.
“Rig counts are increasing at an accelerating pace and given the technological advances of the past three years, this should translate into significant supply,” Wittner said.
“US shale is coming back, and it is coming back strong.”
Since the beginning of the year both crude contracts have traded within a $5 per barrel range, suggesting a lack of strong price momentum in either direction.
“$55 per barrel is quite obviously the pivot point in this market ... and it has been for some time,” said Matt Stanley, a fuel broker with Freight Investor Services (FIS) in Dubai.
Chinese oil demand grew at the slowest pace in at least three years in 2016, Reuters calculations based on official data showed, the latest indication that demand from the world’s largest energy consumer has diminished.
And there are concerns US gasoline demand is stalling.
Gasoline stockpiles rose by almost 21 million barrels in the first 27 days of 2017, compared with an average increase of less than 12 million barrels at the same time of year during the previous decade, according to official inventory data, implying either stalling demand or ongoing oversupply.
Temporary suspension
Iraq’s main oil export terminal, off the southern city of Basra, will stop loading operations for 24 hours, starting midnight Tuesday, because of work to install a new pipeline feeding the facility, two sources at state-run South Oil Company said.
The terminal’s loading capacity is estimated at around 1.8 million barrels per day (bpd).
Loading offshore at three single-point moorings (SPMs) connected with the Basra terminal will not be affected, they said.
OPEC’s second-largest producer after Saudi Arabia, Iraq exported a record 3.51 million barrels per day in December from the southern ports. However, exports fell to 3.275 million bpd, as the country complied with an agreement with other producers to reduce output.

Source: Arab News