Oil prices have declined due to a projected increase in United States crude stockpiles and as Saudi Arabia committed to keep markets balanced.
Brent crude futures, the international benchmark for oil prices, fell 39 cents per barrel to trade at $71.79 while US West Texas Intermediate crude futures for July delivery dipped 59 cents to reach $62.54 per barrel.
Despite the fall in prices, analysts opined that oil markets continue to experience tightness on account of ongoing Organisation of Petroleum Exporting Countries-led supply cuts and rising political tension in the Middle East, according to Offshore Technology.
Data released by industry body American Petroleum Institute showed that US crude inventories increased by 2.4 million barrels for the week ending May 17 to 480.2 million barrels.
Following a cabinet meeting on May 21, Saudi Arabia Media Minister Turki Al-Shabanah stated that the kingdom was committed to achieving balance and stability in the oil market on a sustainable basis.
Saudi Arabia is the de-facto leader of OPEC. The producer cartel enforced production cuts in January 2019 in a bid to reduce global oversupply.
Bank of America Merrill Lynch noted that crude production by OPEC and its allies fell by 2.3 million barrels per day during the period between November 2018 and April 2019 as a result of the cuts.
The supply cuts have had a say on Brent crude prices. Since the start of 2019, prices have soared by more than a third.
Meanwhile, Morgan Stanley has projected that tight supply and demand fundamentals will help push Brent prices to trade in a $75-$80 per barrel range in the second-half of 2019.