Investing.com - Crude prices extended gains in midmorning trade on Tuesday, surpassing key psychological levels, as investors turned their attention toward U.S. weekly supply data.
New York-traded West Texas Intermediate crude futures fell 68 cents, or about 1.0%, to $67.72 a barrel by 10:31AM ET (14:31GMT).
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded down 24 cents, or roughly 0.3%, to $73.82 a barrel.
U.S. crude and Brent managed to break out from key psychological levels of $69 and $75, respectively, their highest levels since late 2014. Both levels had been broken a day earlier but settled below those marks.
Geopolitical tension in the Middle East and concerns about supply disruptions in key oil-producing nations have been sufficient to support the market at three-year highs, while ongoing efforts by major global crude producers to reduce a supply glut further added to positive sentiment.
OPEC and 10 producers outside the cartel, including Russia, have been holding back oil output by around 1.8 million bpd since the start of last year to slash global inventories to the five year-average. The arrangement is set to expire at the end of 2018.
The cartel will meet in June to decide whether the production-cut agreement should be adjusted based on market conditions.
However, Iran's oil minister Bijan Zanganeh reportedly said Monday that if crude oil prices continued to rise there would be no need to extend the agreement.
Downward pressure on oil prices have also come from the escalation in U.S. drilling for new production.
U.S. drillers added five oil rigs in the week to April 20, bringing the total count to 820, Baker Hughes energy services firm said in its closely followed report last Friday. That was the highest number since March 2015, underscoring worries about rising U.S. output.
Indeed, domestic oil production - driven by shale extraction - rose to an all-time high of 10.54 million barrels per day (bpd) last week, the Energy Information Administration (EIA) said. Only Russia produces more at almost 11 million bpd.
Analysts and traders are concerned that booming U.S. shale oil production could potentially derail OPEC's effort to end a supply glut.
With all this in the background, investors looked ahead to fresh data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.
The American Petroleum Institute is due to release its weekly report at 4:30PM ET (20:30GMT). Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 2.6 million barrels.
In other energy trading, gasoline futures lost 0.1% to $2.1285 a gallon by 10:34AM ET (14:34GMT), while heating oil gained 0.5% to $2.1524 a gallon.
Natural gas futures rose 1.1% to $2.804 per million British thermal units.