Published: Tue, June 20, 2017
Money | By Armando Alvarado

Crude Oil Tumbles To Lowest Since November

SINGAPORE, June 16 Oil prices edged up on Friday but remained near six-month lows, held down by an ongoing supply overhang that persists despite an OPEC-led effort to cut production and prop up crude markets.

Brent crude futures were down 7 cents or 0.2 percent at $46.93 per barrel at 0053 GMT, after slumping almost 4 percent in the previous session.

West Texas Intermediate for July delivery was at US$44.42 a barrel on the New York Mercantile Exchange, down 4 cents, at 9:36am in Hong Kong.

OPEC and other producers have agreed to restrict output and cut production by 1.8 million bpd to March next year to soak surplus crude from the market.

Though the USA crude oil inventories fell by 1.66 million-barrels, the decrease was below the analyst expectations of 2.45 million barrels of drawdown.

The bearish gasoline data overshadowed a 1.7 million-barrel drawdown in US crude stocks, analysts said.

Oil stocks are near record highs in some parts of the world, and producers outside the Opec deal are increasing output.

Add in Russia's tanker shipments and its total exports are likely to be more than 9 million bpd.

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In Nigeria, production was up more than 174,000 bpd to 1.68 million bpd as supplies sidelined by militant attacks on energy infrastructure a year ago came back into operation.

U.S. inventories fell less than forecast last week, keeping supplies more than 100 million barrels above the five-year average, according to data from the Energy Information Administration on Wednesday.

Additionally, the EIA reports that the largest global increase for crude oil will occur in quarter two of 2018, due to OPEC and Brazilian-driven production are on the rise.

The EIA expects US output to grow by 460,000 bpd in 2017, while OPEC forecasts USA production to increase by 800,000 bpd in 2017.

Additionally, the International Energy Agency (IEA) said that the non-OPEC nations like Canada, Brazil and the United States will add about 1.5 million barrels of supply in 2018, which is higher than the expected demand growth of 1.4 million barrels.

Opec now expects U.S. production to increase by 800,000 barrels per day in 2017.

Given the extended production cuts, EIA now forecasts OPEC members' crude oil production to average 32.3 million barrels per day in 2017 and 32.8 million barrels per day in 2018, down 0.2 million barrels per day and 0.4 million barrels per day, respectively, from the previous STEO.

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