Stars align against crude oil prices as $50 comes under threat

Stars align against crude oil prices as $50 comes under threat

Stars align against crude oil prices as $50 comes under threat

Still, oil markets received some support from official USA data which showed crude inventories fell sharply last week as refining and exports surged to record highs.

He added that the move could complicate the market outlook in a way that "would not be favorable to oil prices".

Gasoline stocks fell by 2.9 million barrels, compared with analysts' expectations in an economists' poll for a 1.1-million-barrel drop.

"News that Libyan production is continuing to grow at levels last seen over three years ago, threatens the prospect that, with rising USA output, the OPEC cuts will become nearly meaningless".

With output also rising in Brazil, Norway and several other non-OPEC countries, the scale of the US boom explains why OPEC and its allies are struggling to engineer a deficit in the global oil market and push stocks down to their five-year average.

Industry data on US oil inventories from the American Petroleum Institute (API) late on May 31 was seen buoying prices.

West Texas Intermediate, the USA benchmark for the price of oil, still in the July contract, was up 0.20 percent to $48.41 per barrel. USA production rose for the 14th time in 15 weeks, by 22,000 barrels a day to 9.34 million.

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Russian Federation is unlikely to prolong its supply deal with OPEC beyond the nine-month extension agreed last week, because by then it will have served its objective, Oleg Vyugin, a Rosneft board member, said on Thursday.

Futures slumped as much as 3.4 percent in NY and Brent crude in London slid below $50 a barrel.

OPEC's decision to extend the same level of cuts for nine months rather than reducing production further could prove insufficient to draw out the surplus despite OPEC's strict compliance with the curbs. Analysts polled by Reuters expected US stocks to have fallen by 2.8 million barrels last week, their eighth straight weekly decline.

The general trend among USA producers points to a need to boost growth forecasts amid anticipated production acceleration the second half of this year, said consultancy Energy Aspects.

Rising prices, which had tumbled from above $100 a barrel in 2014, have encouraged U.S. shale producers to increase drilling.

Ultimately, prices rather than planned cuts will rebalance the market, which will most likely require a period of flat or lower prices to curb shale growth and ensure USA output does not outstrip demand.

The Organization of Petroleum Exporting Countries' output in May jumped 315,000 barrels a day from a month earlier to 32.21 million, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data.

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