Oil prices fell over 2.2% for a third day on Tuesday. Amid reports from the IEA (International Energy Agency) to cut global oil demand forecast by 100,000 barrels a day in 2017 and 2018, which was more bearish news instead of a more bullish outlook released by OPEC on Monday. Higher prices, warmer temperatures, and increased output from producer countries has contributed to the slashed forecast. At the beginning of this month weather forecasts were calling for colder weather, but as we are reaching mid-month, temperatures have been relatively mild and warmer than usual. In addition, the IEA released news that the US is on track to become the leader in Oil and Gas production by 2025. The U.S. EIA (Energy information Administration) has forecasted total oil production to average 9.2 million barrels a day in 2017 and 9.9 million barrels a day in 2018, which would be the highest output ever by the U.S. tackling a 9.6 million record set back in 1970.
Strong U.S. Shale production is shifting the global oil market and may keep a ceiling on prices for the time being. As looming tensions in the Middle East which attributed to the most recent price support have been cast aside traders are focusing more on U.S. Shale output. December WTI Crude dropped to $55.38 a barrel on the NYMEX. December RBOB Gasoline fell 2.09% to a $1.74 per gallon and December Heating oil dropped 1.69% to $1.89 per gallon.