OPEC's simple problem. Despite Saudi cuts, it's shipping more oil: Russell

EIA revises down oilsands reserve drop by about a third after data error

Crude prices have fall by more than 10 percent since late May, pulled down by an supply glut that persists despite a move led by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by nearly 1.8 million barrels per day (bpd) until the end of the first quarter of 2018.

The oil producing group's May report mentioned that the global oil supply increased by 0.13 million barrels per day, mb/d, in May to average 95.74 mb/d.

Inventories rose by 2.75 million barrels in the week to June 9 to 511.4 million, according to the American Petroleum Institute report, compared with expectations for a decrease of 2.7 million barrels.

Global oil demand growth will accelerate next year to 1.4 million barrels a day, or 1.5 percent, led by economic expansion in China and India.

While output is no doubt important, for the immediate market impact it's probably better to focus on what the group is actually exporting.

Data on Wednesday showed usa consumer prices unexpectedly fell in May and retail sales recorded their biggest drop in 16 months.

The U.S., Brazil, Canada and other producers outside the Organization of Petroleum Exporting Countries will increase output next year by the most in four years, the IEA said.

Brent crude oil futures gained 0.43 dollar or 0.89 percent to close at USD 48.72 a barrel at NYMEX.


The production cuts have been extended for another nine months.

The IEA also forecast USA crude supply to grow by 430,000 bpd in 2017, and by 780,000 bpd in 2018, with many forecasting USA production to cap 10m bpd next year.

Oil prices settled higher on Tuesday after OPEC detailed supply cuts around the world, but the cartel also said overall production rose in May, and crude stayed well below $50 a barrel despite the modest recovery.

"This suggests that production cuts by 11 Opec members, who have committed to the reductions, are increasingly coming at the expense of market share". With this, despite a pledge to cut output, the OPEC also reported a rise in its production.

Total world proven crude oil reserves stood at 1,492 billion barrels, bn b, at the end of 2016, increasing slightly by 0.3 percent from the previous year's level of 1,488 bn b, indicated the report, noting that the largest additions came from Iraq, Venezuela and Norway.

Both contracts hit their lowest since May 5, driving them into technically oversold territory.

Ross said surplus oil stocks were being drawn down, "but not at the rate Opec would like to see" because of United States production.

The U.S. alone will account for about half that increase in supply, the IEA said.

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