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Oil hits the lowest since November as over-supply glut continues

Oil hits the lowest since November as over-supply glut continues

The agency's first look at 2018 suggested that US crude production will increase 780,000 b/d year-over-year, but "such is the dynamism of this extraordinary, very diverse industry it is possible that growth will be faster". USA 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. US shale-oil drillers, who aren't a part of the output agreement, have been cited as the main culprit, disrupting OPEC's efforts to stabilize oil prices.

Benchmark Brent was up 15 cents at US$47.06 by 0820 GMT.

Nigeria also expanded production of its benchmark Bonny Light crude oil, which is now set to reach 62,000 barrels per day late this summer.

Oil prices continue to trade under pressure as rumors of issues with the current OPEC deal are making the rounds.

Traders said that the main factor driving the low prices was a steady rise in US production undermining the OPEC-led effort to tighten the market.

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Oil prices have been on a downward trend for nearly a month since the Organization of the Petroleum Exporting Countries and big-producer allies chose to extend an agreement that holds back almost 2% of the global crude supply. WTI for July delivery, which expires Tuesday, fell $1.24 to $42.96 at 12:44 p.m., after touching $42.75, the lowest intraday level since November 14.

Nothing is left for OPEC to do except urge its members to stick to the production cuts and agree to further crude oil reductions.

USA shale oil production is increasing even after 123 companies have filed for bankruptcy after 2015. "Identifiable oil inventories - both crude and product in the OECD, China and selected other non-OECD countries - increased at a rate of (about) 1 (million bpd) in Q1".

The $1.3 billion Andurand Commodities fund was down 17.33 percent for the year by May 31, according to an HSBC report. The Energy Information Agency (EIA) estimates that shale production have risen to 9.33 million barrels per day as at the 9th of June this year, up more than 700,000 bpd since it bottomed in September 2016. The latest data from the oil-services firm Baker Hughes showed the rig count climbed by 6 to a 26-month peak of 747. "The sentiment that I have been hearing from clients is that their concern is demand's not there and there's too much supply growth in the U.S".

Falih said that contributors to the agreement include major producers outside of OPEC like Russian Federation and 10 other oil-rich nations. In the last month alone, explorers drilled 125 more wells in the Permian Basin than they would open.

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