Oil hits six-week low as Opec fails to curb oversupply

U.S. West Texas Intermediate (WTI) crude futures were down 14 cents at $44.58 per barrel.

Brent for August settlement rose 44 cents to $47.36 a barrel on the London-based ICE Futures Europe exchange. Yet crude prices have slid about 12 percent since that day as other countries have boosted output.

Oil has declined nearly 8 percent this month amid speculation that rising U.S. supplies will offset output curbs by the Organization of Petroleum Exporting Countries and its allies, including Russian Federation. Analysts had expected a decrease of 2.7 million barrels.

"I definitely think we're in a new trading range", said Tariq Zahir, crude trader and managing member at Tyche Capital Advisors in NY.

OPEC member nations - Nigeria and Libya - which are exempt from production cuts have been ramping production.

But Brazil, Canada, the United Kingdom, Kazakhstan, Ghana and the Congo will also contribute to a higher output as long-planned projects will ramp up and come online.

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

Gasoline stocks, however, rose by a surprise 2.1 million barrels, against an expectation of a 457,000 gallon drawdown as Americans spend more time travelling to vacation destinations around North America.

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

The U.S. government's Energy Information Administration has raised its forecast for domestic output growth in 2017 to 460,000 bpd from a predicted decline of 80,000 bpd in December.

OPEC said Tuesday, that output from the group rose by 336,000 barrels per day in May to 32.14m barrels per day. 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.

Oil prices plunged almost 4% on Wednesday after the U.S. Energy Information Administration said that crude oil inventories fell by 1.7 million barrels in the week ended June 9, disappointing expectations for a decline of around 2.8 million barrels.

OPEC now expects US production to increase by 800,000 bpd in 2017.

Then on Wednesday, the International Energy Agency said in a report that output growth among non-OPEC members such as the US would outpace the increase in demand.

  • Zachary Reyes