Investing.com - Oil prices were flat on Wednesday morning in Asia after sliding below recent three-year highs, as rising U.S. crude inventories and production dragged on an otherwise bullish market.
Crude Oil WTI Futures for June delivery were trading at $67.69 a barrel in Asia at 11:30PM ET (03:30 GMT), down 0.01%. Brent crude futures for June delivery, traded in London, were up 0.04% at $73.89 per barrel.
Meanwhile, Shanghai Crude Oil WTI Futures for September delivery were down 0.52% at 438.60 yuan ($69.57) per barrel.
Oil prices have been swinging due to supply disruptions and also strong demand, especially in Asia.
Production cuts led by the Organization of the Petroleum Exporting Countries (OPEC), which were introduced in 2017 with the aim of propping up the market, continue to support oil markets. Political risk to supplies in the Middle East, Venezuela and Africa is also a contributing factor.
Iran’s oil minister Bijan Zanganeh said there would be no need to extend the OPEC-led supply cut deal if oil prices strengthened, contrary to Saudi Arabia’s stance. If the pact is not extended, the supply restraint will expire by the end of this year.
However, rising production from the U.S is still a key market theme that continues to weigh on oil prices.
U.S. crude oil production has jumped by more than a quarter since mid-2016 to over 10.54 million barrels per day (bpd), surpassing Saudi Arabia’s output of around 10 million bpd. Only Russia currently produces more, at almost 11 million bpd, which the U.S. is expected to surpass by 2019.
U.S. crude inventories rose by 1.1 million barrels in the week to April 20 to 429.1 million. A rising U.S. rig count also indicated further increases to come in the country’s crude output.
Meanwhile, prices are propped up by fears that the U.S. may take new measures against struggling Venezuela and especially OPEC member Iran.
The U.S. has until May 12 to decide whether it will leave a nuclear deal with Iran and impose new sanctions against Tehran. As Iran is OPEC’s third-largest producer, sanctions on the nation could tighten global oil supplies.