Oil prices fell on Tuesday as the cautious sentiment of the past week prevailed, despite ongoing OPEC-led production cuts and Middle East tensions.
Brent crude futures were at $62.94 per barrel at 0324 GMT, down 22 cents, or 0.35 percent, from their last close. U.S. West Texas Intermediate (WTI) crude was at $56.62 per barrel, down 14 cents, or 0.25 percent.
The falls came after both crude benchmarks early last week hit highs last seen in 2015, but traders said the market had lost some momentum since then.
Traders said they were cautious on betting on further price rises.
"Prices...are starting to look like a pause or pullback is needed," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
This sentiment comes in part on the back of rising U.S. oil output, which has grown by more than 14 percent since mid-2016 to a record 9.62 million barrels per day (bpd).
Fitch Ratings said in its 2018 oil outlook that it assumed 2018 "average oil prices will be broadly unchanged year-on-year and that the recent price recovery with Brent exceeding $60 per barrel may not be sustained".
So far in 2017, Brent has averaged at $54.5 per barrel.
Despite the cautious sentiment, traders said oil prices would unlikely fall very far, largely due to ongoing supply restrictions led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, which have contributed to a reduction in excess supplies.
show chapters The technician who called the oil rally sees crude hitting $60 1:44 PM ET Thu, 9 Nov 2017 | 07:38 OPEC also raised its oil demand forecast, saying the world would need 33.42 million barrels per day (bpd) of OPEC crude next year, up 360,000 bpd from its previous forecast and marking the fourth consecutive monthly increase in the outlook since July.
In China, refiners raised crude oil processing runs to near record monthly levels in October, with operations increasing by 7.4 percent to 50.51 million tonnes, or 11.89 million bpd, China's statistics bureau said on Tuesday.
OPEC is due to meet on Nov. 30 to discuss further output policy. The group is expected to agree an extension of the cuts beyond their current expiry date in March 2018.
Looking further out, the International Energy Agency said on Tuesday global oil demand would only fall modestly due to the expected rise of electric vehicles, with consumption inpetrochemicals and other transportation still growing.
In its World Energy Outlook 2018, the IEA estimates there will be 50 million electric vehicles (EVs) on the road by 2025 and 300 million by 2040, from around 2 million now. This is expected to cut 2.5 million bpd, or about 2 percent, off global oil demand by that time.
Still, the IEA's "New Policies Scenario", based on existing legislation and policy intentions, expects oil prices to rise towards $83 a barrel by the mid-2020s.