Oil prices fall as Organisation of Petroleum Exporting Countries' production soars and regional fears subside

Oil prices fell in early trading on Friday 17 April, ending a run of rallies earlier in the week, after the Organisation of Petroleum Exporting Countries (Opec) said that its output surged in March, adding to a global glut.

Opec said that its March production jumped 810,000 barrels per day (bpd), to 30.79 bpd which is equivalent to a third of global supply.

Front-month Brent crude futures were down 15 cents since their last settlement to $63.83 per barrel, while WTI US crude was down 20 cents at $56.50 a barrel.

Demand will be higher than thought

Thanks to dipping output from the United States and other rival producers due to oil prices halving since June last year, the cartel said demand for its oil this year would be higher than previously thought.

"The strategy of Opec to put pressure on the high-cost producers is working, but the individual members seem to have moved off that focus and are instead producing as much as they can," said Jamie Webster, analyst at IHS in Washington and an Opec expert.

Opec's report may reinforce the perception that major producers are staking out market share ahead of a potential rise in Iranian exports following its framework accord with world powers over its nuclear programme.

The price fall at least temporarily ended a rally that has seen Brent gain over 16% in value since the beginning of the month, triggered by Middle East conflict and a dip in US oil production.