"The message implied by Brent's greater premium to WTI has been for US producers to ship more crude overseas to offset OPEC's voluntary supply cuts and potential supply decreases elsewhere", Oil Futures Editor Geoffrey Craig said in the emailed commentary.
Brent crude for June delivery dropped 42 cents to $73.44 a barrel on the London-based ICE Futures Europe exchange.
Last year, a group of oil producing countries- including OPEC and non-OPEC producers led by Russia- agreed to cap output by about 1.8 million bpd in a deal running from January last year until the end of 2018.
As a result of the rising production, the United States oil is increasing its supply to world markets from Europe to Asia, undermining OPEC's efforts to tighten the supply. However, analysts at Moody's expect oil prices to remain volatile, ranging between $45-65 per barrel, and forecasts average prices of $60 per barrel in 2018 and 2019 before softening to $55 per barrel.
Mounting tensions between the USA and Syria following an alleged chemical attack from Syrian President Bashar al-Assad has also driven prices in recent times with Brent Crude rising over 7% to $72 a barrel over the week ending on 13 April. The first one is the OPEC+ deal on limiting production by exporting countries and geopolitical destabilisation, including the threat of a military confrontation between major producers and exporters of oil.
"Looks like OPEC is at it again".
"Oil prices are artificially Very High! No good and will not be accepted!"
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West Texas Intermediate crude for June delivery slid 13 cents to $67.57 a barrel at 11:08 a.m. on the New York Mercantile Exchange.
Investors are also assessing US inventory levels, with supplies seen declining last week, according to a Bloomberg survey ahead of Energy Information Administration data released on Wednesday.
Ole Hansen, head of Commodity Strategy at Saxo Bank, said crude oil surged higher after emerging from several weeks of hibernation.
At the time of writing, Brent crude oil futures were trading at US$74.82, representing an increase of 45% year-on-year.
Donald Trump has doubts about the extension of the "nuclear deal" with Iran at the time when Saudi Arabia has been speculating on the bull market, Venezuela has been cutting its oil production, the situation in Syria and in the Middle East in general has been exacerbating.
Analysts surveyed Monday by S&P Global Platts were looking for stocks to have declined by 1.1 million barrels for the same period.
The biggest factor working against a runaway bull market at this time is rising USA production.