SINGAPORE: U.S. oil prices dipped away from three-and-a-half year highs on Thursday amid high output from Russia, the United States and Saudi Arabia, although unplanned supply disruptions elsewhere and record demand stemmed a bigger decline.
U.S. West Texas Intermediate (WTI) crude futures were at $72.54 a barrel at 0253 GMT, down 22 cents, or 0.3 percent from their last settlement. WTI hit its highest since November 2014 at $73.06 per barrel in the previous session.
Brent crude futures were at $77.54 per barrel, down 8 cents from their last close.
Oil prices have been rallying for much of 2018 on tightening market conditions due to record demand and voluntary supply cuts led by the Middle East dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC).
Unplanned supply disruptions from Canada to Libya and Venezuela have added to those cuts.
Yet not all indicators point towards an ever-tightening market.
Although output growth is slowing, U.S. crude production C-OUT-T-EIA is approaching 11 million barrels per day (bpd).
With Russia and Saudi Arabia at similar levels, and output expected to rise as OPEC and Russia ease their supply restrictions, there will soon be three countries pumping out 11 million barrels of crude each and every day.
This unprecedented output means just three countries are meeting a third of world consumption.
Despite this, analysts warn that the market has little spare capacity to deal with further disruptions.
