South Korea's SK Innovation, which owns South Korea's top refiner SK Energy, said on Tuesday it expects US shale output to keep oil prices low, and is looking for opportunities to bring in USA crude oil. "A scenario that would not be favorable to oil prices".
Part of the problem for OPEC is booming shale production in the United States.
Libya's crude exports in May rose to the highest level in 31 months on increasing flows from Sharara, the country's largest field, according to vessel-tracking data compiled by Bloomberg.
"Oil prices dropped below 50 this morning as [the] continued global oil glut seems to outweigh bullish USA oil inventory reports and Trump exiting the 2015 Paris climate agreement", said Michael Poulsen, oil risk manager at Global Risk Management.
Global benchmark, Brent crude fell 87 cents, or 1.7 per cent, to $51.42 a barrel, while United States light crude was 59 cents, or 1.2 per cent, lower at $49.21. KLR Group analysts said in a research note Thursday that demand totaled 20 million barrels per day in March, a month-over-month increase of 4.4% and a year-over-year increase of 400,000 barrels per day, or 2.1%.
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Futures slumped as much as 1.8 percent in NY while Brent crude in London slid below $50 a barrel.
OPEC output climbed in May, led by gains from Libya and Nigeria, countries that are exempt from supply cuts. Gasoline stockpiles booked a drop of 2.9 million barrels last week, compared with a fall of 800,000 barrels in the previous week. OPEC Secretary-General Mohammad Barkindo and Russian Energy Minister Alexander Novak said Wednesday that they are looking for ways to formalize a permanent alliance among oil producers to take more control of oil markets.
Still, higher seasonal demand in the second half of 2017 could result in a significant drawdown in inventories that would move the market closer to balance, analysts said.
"It is necessary to work out new framework principles for continued steady cooperation between OPEC and non-OPEC even after the expiration of the Vienna agreements", said Novak.
The general trend among US producers points to a need to boost growth forecasts amid anticipated production acceleration the second half of this year, said consultancy Energy Aspects. Crude oil prices fell ~6% after OPEC's meeting.
Inventories fell by 6.43 million barrels last week, according to Energy Information Administration data, more than double the median estimate in a Bloomberg survey.