"WTI is expected to be relatively weaker versus other benchmarks on the back of growing Cushing stockpiles and increasing domestic production in the USA", said Virendra Chauhan, an analyst at industry consultant Energy Aspects Ltd., referring to the largest American storage hub.
The price spread between US benchmark WTI and Brent has widened to more than $7 a barrel.
Oil prices ended a shade firmer after retreating from multi-year highs hit early in the day on Tuesday, supported by concerns that USA sanctions on Iran are likely to restrict crude exports from one of the biggest producers in the Middle East.
West Texas Intermediate crude rose 26 cents to settle at $70.96.WTI´s discount to Brent was as much as $7.28, its widest since December 12 on surging US output.
In its monthly report, the Paris-based IEA cut its forecast for global demand growth to 1.4 million barrels per day for 2018, from a previous estimate of 1.5 million bpd.
US President Donald Trump's decision to reintroduce sanctions on Iran have thrown a curveball into Middle East relations, with many expecting this to have continued ripples throughout the world and region.
The tightening market has all but eliminated a global supply overhang that depressed crude prices between late 2014 and early 2017.
The data poses worries that near-record high refinery runs may be short-lived.
The call on OPEC crude and stocks will average around 32.25 mb/d for the remainder of 2018, almost 0.6 mb/d higher than April output, according to the report.
Additionally, the market retreated as the USA dollar .DXY strengthened against other currencies to the highest since December.
OPEC crude production eased by 130,000 barrels per day (b/d) in April, to 31.65 mb/d, on further declines in Venezuela and lower output in Africa, the International Energy Agency (IEA) said in its Oil Market Report.
"A rising oil price brings upside price risk to all commodities", Morgan Stanley said in a note this week.
The pending US sanctions against Iran have also contributed to the price rise.
OPEC's success with the oil production cutting deal has been to a significant extent aided by Venezuela's catastrophically dropping production as the country grapples with foreign exchange shortage, USA sanctions, and a devastating economic crisis.
OPEC figures published on Monday showed that oil inventories in OECD industrialised nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017.
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