Oil prices struggle on doubts OPEC can rein in oversupply

The oil research firm noted that the considerable drop in Brent futures prices, soon after the OPEC's meeting in May 25, this year, was mainly caused by an extension of the production cuts, and high level of speculation in the market.

West Texas Intermediate for July delivery was at $44.70 a barrel on the New York Mercantile Exchange, down 3 cents, at 10:01 a.m. London time.

OPEC and its allies have promised to restrict output until at least the end of the first quarter of next year to try to drain surplus supply. Lower crude oil prices impact oil and gas producers' profitability.

The report also showed that gasoline inventories increased by 2.1 million barrels, compared to forecasts for a drop of 457,000 barrels.

Oil inventories are near record highs in some parts of the world, and producers outside the Opec deal are increasing output.

Crude output from OPEC nations rose by 290,000 bpd in May to a 2017 high of 32.08 million barrels per day, according to the EIA.

Add in Russia's tanker shipments and its total exports are likely more than 9 million bpd.

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Shale oil production is expected to continue growing in the U.S. The number of operating rigs there has increased for 21 straight weeks, according to oil field services company Baker Hughes.

United States crude production has increased over 10 percent within the past year, to 9.3 million bpd.

US crude stockpiles dropped by 1.66 million barrels last week, the EIA reported Wednesday.

Crude prices fell almost 4 percent on Wednesday, after US gasoline inventories rose unexpectedly and the International Energy Agency said it expects supply to outpace demand in 2018 despite consumption hitting 100 million bpd for the first time.

On June 14, 2017, the EIA (U.S. Energy Information Administration) released its weekly petroleum status report.

Canada's oil-sands will increase production rapidly in the next three years, ranking only behind US shale as the biggest contributor to global supply growth. Brent, the global oil benchmark, fell $1.72, or 3.5%, to $47.00 a barrel.

OPEC's pledge was to cut some 1.2 million bpd, while other producers including Russian Federation would bring the total reduction to nearly 1.8 million bpd.However, some OPEC members including Nigeria and Libya have been exempt from cutting, and their rising output undermines efforts led by Saudi Arabia.

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