Oil prices dip as supplies remain ample despite production cuts
Oil prices dipped on Thursday, weighed down by plentiful supplies despite an ongoing effort led by OPEC to cut production in order to tighten the market and prop up prices.
Brent crude futures LCOc1 were down 21 cents, or 0.4 percent, from their last close at $52 per barrel at 0148 GMT.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $48.88, down 19 cents, or 0.4 percent.
The downward correction partly reversed gains from the previous session when prices rose on the back of a drawdown in U.S. crude inventories and a slight dip in American production.The U.S. Energy Information Administration said on Wednesday that crude inventories USOILC=ECI fell 1.8 million barrels for the week to May 12, to 520.8 million barrels. the drawdown was smaller than expected, and many traders say there is still more oil in the system than the market can absorb.
Overall oil supplies remain ample, with large amounts of crude from the United States and other producers being shipped to the big consumer regions in northern Asia, undermining OPEC-led efforts to tighten the market.The Organization of the Petroleum Exporting Countries (OPEC) and some other producers including Russia have pledged to cut production by almost 1.8 million barrels per day (bpd) during the first half of 2016, a deal likely to be extended until the end of March 2018. producers have been quick to fill any potential supply gap.
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