Oil prices struggle on doubts OPEC can rein in oversupply

Sample bottle of crude oil are seen in this illustration

Sample bottle of crude oil are seen in this illustration

Oil has slumped despite output cuts of 1.8 million barrels a day by the Organization of the Petroleum Exporting Countries and non-Opec producers including Russian Federation.

In the United States, which is not participating in any deal to hold back production, oil output has risen more than 10 percent over the past year to 9.3 million bpd, and the Energy Information Administration (EIA) expects that figure to rise above 10 million bpd in 2018. 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 U.S. production to cap 10m bpd next year.

Both crude benchmarks have lost all the gains made at the end of a year ago after the Organization of the Petroleum Exporting Countries agreed with other big producers to cut output in an effort to prop up prices.

Oil prices edged down on Tuesday after OPEC reported an increase in its production for May despite a supply cut agreement and said the oil market was rebalancing more slowly than expected.

Oil prices have been under pressure in recent weeks as concern over rising US shale output offset production cuts by OPEC and non-OPEC members.

July WTI (West Texas Intermediate) crude oil (USO) (UCO) (XOP) futures contracts fell 0.04% to $44.7 per barrel in electronic trade at 1:15 AM EST on June 15, 2017. As of April, inventories of oil in industrialized nations were 292 million barrels above their five-year average, according to the same sources.

Crude oil prices fell almost 4 percent Wednesday after government data showed gasoline inventories and oil production increased.

The forecast for U.S. total oil production for 2017 has been revised 90,000 bpd higher, to average 13.1 million bpd, following further rig additions and increased spending.

The International Energy Agency stated that it expects oil supplies to be higher than demand in the next year, despite a rise in global consumption.

US production has is up 10 percent over the past year to 9.33 million bpd.

The bulk of the upward adjustment in non-OPEC oil supply since December "has come from the US", OPEC said.

The export of oil from the OPEC countries in 2016 grew by 6.5 percent up to 25.01 million barrels per day.

"'Whatever it takes" might be the mantra, but the current form of "whatever' is not having as quick an impact as expected", the IEA said in a reference to Saudi Arabia's promise to do "whatever it takes" to rebalance oil supply and demand.

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