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


Pressure from US oil production and some OPEC members mean market balancing is stalled, the International Energy Agency reported Thursday.

The EIA reports that the price of oil over the course of quarter three may lead to possible increases in price over the next few months of this year.

The U.S. oil boom will keep piling on the pain for OPEC well into next year.

US energy companies added oil rigs for a record 22nd week in a row, energy services company Baker Hughes said on Friday.

On the New York Mercantile Exchange, West Texas Intermediate futures were down 1.08% at $45.96 a barrel.

In Nigeria, production was up more than 174,000 bpd to 1.68 million bpd as supplies sidelined by militant attacks on energy infrastructure previous year came back into operation.

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.


US crude oil output rose 12,000 barrels per day (bpd) to 9.33 million bpd, for the week ending June 9, the EIA said. Data from the U.S. Energy Information Administration (EIA) this week showing growing gasoline stocks and shaky demand, despite the peak summer driving season, sent prices tumbling.

The American Petroleum Institute published industry reports on USA energy levels, finding crude oil stockpiles increased by 2.8 million barrels and gasoline stockpiles increased by 1.8 million barrels last week.

With supplies plentiful, strong demand is needed to support the market, but there are signs of a slowdown.

OPEC said on Tuesday a long-awaited rebalancing of the oil market was under way at a "slower pace" and reported that its own output in May jumped due to gains in nations exempt from a pact to reduce supply.

Last month, OPEC and top nonproducers chose to extend their production cut to remove 1.8 million barrels per day from the market until March 2018 in an effort to push stockpiles below the five-year average.

In addition, the International Energy Agency (IEA) said, Wednesday, it has expectations that non-OPEC growth supply should be higher within the next year than overall global demand growth. The Standard & Poors Energy Sector Index showed a 2.1 drop, overall, with shares of Exxon Mobil falling by 1.4 percent, to hit $81.83; Chevron also fell by almost 2 percent, to hit $106.18. The global benchmark crude traded at a premium of $2.35 to August WTI. Production rose by 12,000 barrels a day to 9.33 million barrels per day.

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