Increased production by Libya and Nigeria pushed Opec production in June to its highest level this year
Expanding Opec output halts longest oil run of the year
Oil halted gains after the longest winning streak this year as Opec output rose amid a boost from members exempt from supply cuts.
Futures slid 0.6 per cent in New York after advancing almost 11 per cent the previous eight sessions. Opec production in June climbed to the highest level this year as Libya and Nigeria pumped more, according to data compiled by Bloomberg. The nations are not required to reduce supply under the Opec -led deal. U.S. crude inventories probably dropped by 2.5 million barrels last week, a Bloomberg survey shows before a government report on Thursday.
While prices have surged 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. U.S. crude inventories remain more than 100m barrels above the five-year average.
“Oil could quite easily revisit its lows again if we don’t see stronger seasonal demand from the U.S. and Opec members increase output further,” said David Lennox, a Sydney-based resource analyst at Fat Prophets. “Supply is well and truly adequate.”
West Texas Intermediate for August delivery was at $46.81 a barrel on the New York Mercantile Exchange, down 26 cents, at 2 p.m. in Hong Kong. Total volume traded was about 24 per cent below the 100-day average. The contract gained $1.03 to $47.07 on Monday.
Brent for September settlement was 29 cents lower at $49.39 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.