Oil prices slide nearly 1 percent on persistent glut concerns

At the same time, output from Libya, exempt from Opec’s deal to cut supply, rose to the highest since October 2014 as production from its biggest field increased.

OPEC leaders and participating N-OPEC countries have agreed to an extension to the current supply cut deal for nine months until March 2018 that aims to reduce global oil supply by 1.76 million barrels per day. “We still anticipate Brent crude oil to dip to $US45 per barrel by mid-2019″.

OPEC had hoped the deal would boost prices and income for members of the cartel.

Aside from helping to rebalance the market, it’s easy to see why some nations agreed to extend production cuts, particularly among non-OPEC producers.

OPEC logo is pictured ahead of an informal meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) in Algiers, Algeria September 28, 2016.

Cushing inventories recorded a draw of 0.75 million barrels which was very close to the API estimate.

But OPEC members may relax the cuts in the second half of this year, for fear of losing market share to USA shale oil producers when demand rises in the summer, said Eugen Weinberg of Germany’s Commerzbank.

Matt Smith, director of commodity research at ClipperData, which tracks oil shipments, said his firm did not see 1.3 million barrels of oil exports from the USA last week. Traders were looking for a draw of about 2.5 million barrels.

Nigeria is more sensitive to changes in oil production than to changes in oil prices – even more so now in an era of lower oil prices. Production cuts created a space in the market for it to fill and if higher prices are achieved, then shale producers become more profitable.

US oil sank 2.7% Wednesday to a almost three-week low after Libya’s state-run oil company said it can now boost production to 8000,000 barrels a day.

John Redwood, Charles Stanley’s chief global strategist, said: “10 years ago the USA produced 5.1m barrels of oil a day”.

While the U.S. shale oil production is keeping a tight lid on oil prices, President Donald Trump’s decision to pull out of the Paris agreement may provide a boost to crude oil prices.

Goldman Sachs analysts have cut forecasts for oil prices, saying falling USA production costs should boost supply for years.

“This outcome could increase the supply-side equation from the United States and complicate OPEC’s forward projections”.

Crude inventories fell 6.4 million barrels (bbl) in the week to May 26, far more than analysts’ expectations for a decrease of 2.5 million bbl. We’ll also discuss OPEC’s crude oil production in May 2017. The first quarter of the year saw a net build in global oil stocks of around 100,000 b/d, taking into account additions to OECD stocks and withdrawals from floating and other non-OECD storage, according to the International Energy Agency. According to the US Department of Energy, seven of the world’s largest oil producers are not in OPEC.