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Bloomberg
Oil snapped its longest run of gains this year as OPEC output rose amid a boost from members exempt from supply cuts. Futures slid 0.5 percent in New York after advancing almost 11 percent the previous eight sessions. OPEC production in June climbed to the highest level this year because of increases from Libya and Nigeria, which aren’t bound by the group’s accord to cut, according to data compiled by Bloomberg. US crude inventories probably dropped by 2.5 million barrels last week, a Bloomberg survey showed before a government report.
While prices have surged in the past week, oil in New York and London still posted a monthly loss in June after tumbling into a bear market on concerns that rising global supply will counter curbs from the Organization of Petroleum Exporting Countries and its partners. US crude inventories remain more than 100 million barrels above the five-year average.
“Given the run of gains and the highest OPEC production in 2017, there might be some closing of positions that temporarily puts pressure on prices,†said Jan Edelmann, an analyst at HSH Nordbank AG in Frankfurt. Nonetheless, “these higher production levels by Libya and Nigeria†probably aren’t “sustainable given the ongoing political tension in this region.â€
West Texas Intermediate for August delivery was at $46.86 a barrel on the New York Mercantile Exchange, down 21 cents, at 9:18 a.m. in London. Total volume traded was about 29 percent below the 100-day average. The contract gained $1.03 to $47.07 on Monday.
Brent for September settlement was 25 cents lower at $49.43 a barrel on the the London-based ICE Futures Europe exchange.
The global benchmark crude traded at a premium of $2.36 to September WTI.
OPEC output rose by 260,000 barrels a day to 32.55 million in June, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. Half of the increase came from Libya and Nigeria, while Saudi Arabia boosted production by 90,000 barrels a day.
Iraq will continue spending on its oil fields even if crude prices slip further, according to Oil Minister Jabbar Al-Luaibi. Iranian output for the month started May 22 reached 3.901 million barrels a day for
the first time since the easing of sanctions, the official IRNA news agency reported.