Oil prices struggle on doubts OPEC can rein in oversupply

Oil prices struggle on doubts OPEC can rein in oversupply

The International Energy Agency mirrored OPEC's sentiments in its own monthly report, saying stronger US crude oil production, which could increase faster than expected, is offsetting OPEC's production aim.

Saudi Arabia's oil exports are expected to fall below 7 million barrels per day this summer, according to industry sources familiar with the matter, and Russian oil exports were seen as broadly flat in the third quarter.

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. West Texas Intermediate (WTI) crude futures were down 12 cents or 0.3 percent at $44.61 per barrel.Crude futures benchmarks are sitting near their lowest levels since late November past year when production cuts led by the Petroleum Exporting Countries (OPEC) were first announced.

Still, supplies outside OPEC will grow even faster, by nearly 1.5 million barrels a day, with about half the expansion coming from USA crude production.

"Although oil prices rebounded from five-month lows in (mid-May), following positive United States jobs data and assurances by Saudi Arabia that Russian Federation is ready to join OPEC in extending production adjustments to reduce a persistent supply glut", OPEC said in its monthly report Tuesday.

"I'm only looking at the first week of June, and on the face of it there's not much change", said Roy Mason of Oil Movements, a UK-based firm that estimates supply by tracking tanker shipments.

US military shoots down Iranian-made drone in southern Syria
Russian Federation supports the Assad regime and issued its threat to coalition aircraft over western Syria in response. Russian Federation condemned the USA action and in retaliation suspended a hotline meant to prevent such incidents.

Miley Cyrus Finally Feels Like People Respect Her
He's the ex-pat Australian actor who is rumoured to be engaged to his pop-star girlfriend Miley Cyrus . Regardless - we're sure shippers will still freak out whenever they see Miley wearing white.

Germany's Loew to rotate against Chile with 100th win in sight
Veteran Universidad de Chile stopper Johnny Herrera stood in for Bravo in Sunday's 2-0 win over Cameroon in Moscow. Among those set to start on Thursday will be keeper Marc-Andre ter Stegen, Loew said.

"For OPEC, an oversupply headache became a migraine", said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

The last time this happened, in mid-2014, preceded a massive selloff in oil that dropped Brent from $108 a barrel to about $47 a barrel in the span of five months.

The U.S. Energy Information Administration report on oil inventories is due this week on Wednesday at 10:30 a.m. EDT.

The Organisation of the Petroleum Exporting Countries agreed to extend that deal that began in January through March 2018, but ongoing growth in US production, along with exemptions for non-members Nigeria and Libya, have offset those cuts to some extent. Both the prices of WTI and Brent have dropped by around 13 percent since May 25, when OPEC said it was rolling over the cuts into March 2018. So while the cutbacks should reduce the world's bloated oil inventories to average levels by the time they're scheduled to end next spring, demand for OPEC crude won't be high enough for the group to reverse the curbs without seeing stockpiles rise again.

The effectiveness of the OPEC-led cuts has been undermined by increasing USA oil production, mostly from shale drillers. We consider that an overly sanguine forecast, even taking into account the "improving momentum in most major economies" in the first quarter of 2017 cited by OPEC.

"In 2018, we expect non-OPEC production to grow by 1.5 million bpd which is slightly more than the expected increase in global demand".