Indian basket of crude oils goes below $50/barrel

"Investors continue to doubt the ability of OPEC to rebalance the oil market, with crude oil prices remaining under pressure amid further signs of rising U.S. oil production", said ANZ Bank.

Compared to that the US West Texas Intermediate futures were at $47.90 a barrel, up 24 cents, or 0.5 percent.

In its monthly short-term energy outlook Tuesday, the EIA said USA oil output average 10 million barrels per day in 2018 up from 9.3 million barrels per day now.

Futures fell as much as 4.7 percent in NY after the Energy Information Administration said American crude supplies rose by 3.3 million barrels last week, following eight straight weeks of declines.

Oil prices slid hard on Wednesday on double-pronged concerns that the rift between Saudi Arabia and the other Gulf nations with Qatar, which began Monday, will wind up boosting output, and unexpectedly high US inventories of crude and gasoline.

The U.S. Energy Information Administration releases official figures midway through the morning session and the results may offset some of the geopolitical factors at play in early trading.

As Brent crude oil closed on Wednesday at its lowest level since before OPEC and other nations agreed to cut output, someone bet half a million dollars on prices surging to $80 by year-end.

The report also revealed a shock increase in diesel and petrol inventories after the EIA estimated U.S. demand fell by 1 million barrels a day last week. He explained that the deterioration in relations between OPEC members Qatar and Saudi Arabia could disrupt the cartel-led agreement on production cuts. The global benchmark crude traded at a premium of $1.78 to WTI. USA refiners are still producing at a very high rate.

OPEC's largest producer Saudi Arabia saw its production fall to 9.93 million barrels per day in May, down 40,000 barrels per day from the previous month, as survey panelists said exports were down significantly despite a rise in direct crude burn.

US drillers have added rigs for 20 straight weeks, the longest streak in at least three decades, undercutting efforts by the Organization of Petroleum Exporting Countries to cut production and eliminate a global supply glut. This decision came in the wake of OPEC's November 30 decision to cut output by 1.2 million bpd for six months effective from January 1.

Greg McKenna, chief market strategist at futures brokerage AxiTrader, said that the boycott of Qatar meant there was "a real chance" that Opec solidarity surrounding its production cuts may fracture.

  • Zachary Reyes