Oil prices fall on OPEC output increase, rising U.S. crude stocks
Oil prices fell by one percent early on Wednesday after data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite its pledge to cut back.Brent crude futures LCOc1 were at $48.25 per barrel at 0039 GMT, down 47 cents, or 1 percent, from their last close.U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $45.94 per barrel, down 52 cents, or 1.1 percent.
The price falls came on the back of an ongoing supply glut that has pulled down crude prices by more than 10 percent since late May despite a move led by the Petroleum Exporting Countries (OPEC) to cut production by almost 1.8 million barrels per day (bpd) until the end of the first quarter of 2018.OPEC's own compliance with the cuts has been questioned, and the producer group said in a report this week that its output rose by 336,000 bpd in May to 32.14 million bpd. to the glut is an ongoing rise in U.S. production driven by shale drillers, which has pushed U.S. output up by 10 percent over the last year to 9.3 million bpd, not far off top exporter Saudi Arabia. C-OUT-T-EIA
"The outlook for oil hinges on the effectiveness of the OPEC cuts relative to the supply increases from U.S. shale," said William O'Loughlin, analyst at Australia's Rivkin Securities.
"Inventory data out last night showed another weekly build in crude inventories despite markets expecting a draw,"
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