Oil markets dipped on Tuesday, pulled down by rising U.S. shale output and fears that another hurricane hitting the Caribbean could knock out refineries and disrupt shipping to and from the United States.
However, falling shipments from top exporter Saudi Arabia prevented prices from dropping further, traders said.
U.S. West Texas Intermediate (WTI) crude futures were at $49.83 per barrel at 0537 GMT, down 8 cents from their last settlement.
U.S. shale production is set to rise for a tenth month in a row in October, the U.S. government said late on Monday. Output across seven shale plays is forecast to rise by nearly 79,000 barrels per day (bpd) to 6.1 million bpd, according to the U.S. Energy Information Administration`s monthly drilling productivity report.
Traders said they were closely eying the path of Hurricane Maria, another top category Atlantic storm that hit the Caribbean islands on Tuesday, to see whether it would knock out oil refineries or disrupt shipping to and from the huge U.S. market.
Outside the United States, Brent crude futures, the international benchmark for oil prices, were down 15 cents at $55.33 a barrel.
Some price support came from data showing Saudi crude exports falling to 6.693 million bpd in July, down from 6.889 million bpd in June.
Saudi Arabia is the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), which together with some non-OPEC producers like Russia, has pledged to hold back around 1.8 million bpd of supplies this year and into 2018 in order to tighten the market and prop up prices.
But with the United States not part of this agreement, analysts said the upside for prices was limited due to the rising U.S. output.
"Prices have experienced justified strength as stocks draw, but the builds will begin again in 2018," Barclays bank said in its September market outlook.
"Technological advancements continue to make inroads in the U.S. shale industry, boosting well-level economics ... 80 percent of the cost base is below $60 per barrel (and) breakevens have fallen a further 15 percent just in the last year," Barclays said.
It said significant amounts of producers could also operate below $40 per barrel.
"We remain bearish on prices at current levels due to expected shale growth, Chinese economy concerns," the bank said, adding that its average Brent and WTI price forecast was $53 and $49 per barrel, respectively, for this year and $52 and $49 per barrel for 2018.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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