Oil slides, hits six-month low on rising global production

China also said crude oil production fell 3.7% in May from a year earlier to 16.26 million metric tons, or 3.83 million barrels per day (bpd), the lowest daily level on record.

On Thursday, oil prices hit six-month lows.

Brent also slumped, losing $1.72, or 3.5 percent, to settle at $47 a barrel.

Oil fell yesterday after reports showed global supply was rising and U.S. crude inventories were still increasing, raising concerns the market could stay oversupplied for longer than expected.

Parties to an agreement led by the Organization of Petroleum Exporting Countries to balance the market through managed production declines chose to extend the arrangement by three months into early 2018.

Global oil benchmark, Brent crude, extended its decline on Wednesday as it fell to a seven-month low after data showed an unexpectedly large weekly build in United States' petrol inventories.

Last month, Iran exported about 1.1 million bpd to Europe including Turkey, nearly reaching pre-sanction levels and only slightly below the 1.2 million bpd supplied to Asia, the source said. USA inventories fell less than forecast last week, keeping supplies more than 100 MMbbl above the five-year average, according to data from the EIA on Wednesday.

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.

Crude oil futures plunged Wednesday amid a prolonged global supply glut that may worsen despite OPEC's production limits. "This looks challenging", AB Bernstein said.

The EIA expects United States oil production to continue towards 9.3 barrels per day in 2017 and almost 10.0 million barrels per day in 2018.

The upshot of all of this is as obvious as it will be disheartening to petrostates: the oil market will swing further into oversupply next year.

Supply from 11 OPEC members with production targets under the accord-all except Libya and Nigeria-averaged 29.729 million bbl/d last month, according to figures from secondary sources that OPEC uses to monitor output.

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

  • Zachary Reyes