OPEC's simple problem. Despite Saudi cuts, it's shipping more oil: Russell

LONDON, June 15 (Reuters) - Some U.S. shale producers claim they can produce oil profitably with prices well below $50 per barrel or even $45 per barrel; the oil market is likely to put those claims to the test.

This was "due to changes in fundamentals, especially the shift in USA supply from a forecast contraction to positive growth", the report said.

However, prices are still down by almost 13 percent since May 25, when the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other oil producers agreed to extend production cuts.

Recovering production from Libya and Nigeria, both of which were exempt from OPEC cuts, and high exports and production from Russian Federation were also contributing to the ongoing glut.

"The rebalancing of the market is underway, but at a slower pace", the report said, acknowledging it will take more time to tighten the supply-demand balance.

China imported 12.5 percent more oil in the first four months of this year, but imports from Saudi Arabia rose by a paltry 2.5 percent.

Looking at anticipated growth in global oil demand this year, OPEC reiterated its forecast of 1.27 million barrels per day (bpd).

USA light crude was down 25 cents at $44.48, also not far off six-month lows.

However, prices for both benchmarks are still way down from the prices seen ahead of Opec's decision on 25 May to extend its deal to cut production until March 2018 - Brent traded around $54 per barrel while WTI was priced at $51 per barrel in the days before the meeting.

The US Energy Information Administration (EIA) said gasoline inventories increased by 2.1 million barrels during the week ended June 9, while crude inventories decreased by 1.7 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub USOICC=ECI fell by 1.2 million barrels, EIA said.

Shale oil production is expected to continue growing in the U.S. The number of operating rigs there has increased for 21 straight weeks, according to oil field services company Baker Hughes.

The International Energy Agency said stored oil in industrialized nations-a proxy for global supply- grew by 18.6 million barrels in April. Crude output rose while nationwide inventories fell less than predicted.

Adding to the supply surplus is rising United States production from shale drillers that has pushed USA output up by 10% over the previous year to 9.3 million bpd, not far below levels by top exporter Saudi Arabia.

The forecast for US total oil production for 2017 has been revised 90,000 bpd higher, to average 13.1 million bpd, following further rig additions and increased spending.

  • Zachary Reyes