Stockpiles Fall Less Than Expected, Oil Prices Drop

Oil prices have fallen by about 10% since Opec and non-member countries including Russian Federation recently agreed to extend production cuts until the end of March 2018.

A rapid rise in USA shale oil output will contribute to the increase in non-Opec supply next year, the IEA said.

Brent, against which half of the world's oil is measured, plunged by $1.79 to $46.93 per barrel as of 7.50pm Nigerian time, while the USA benchmark, West Texas Intermediate, dropped to $44.66 per barrel, the lowest level since November 14, 2016.

OPEC and other producers have agreed to restrict output and cut production by 1.8 million bpd to March next year to soak surplus crude from the market.

The IEA said on Wednesday it expected growth in non-OPEC supply to be higher next year than growth in overall global demand.

Traders said the slight increases were a result of the threat of a partial export halt in Libya.

Crude oil prices fell almost 4 percent Wednesday after government data showed gasoline inventories and oil production increased. China also said crude oil production fell 3.7% in May from a year earlier to 16.26 million metric tons, or 3.83 million barrels per day (bpd), the lowest daily level on record.

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Brent has dropped back below $50 since the OPEC meeting.

That compares with analysts estimates in a Reuters poll for a 0.5 million barrel draw in gasoline stocks and a 2.7 million barrel draw in crude inventories.

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

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

Shale producers, in particular, can react quickly to market developments, because they are less capital intensive than other ventures. Prices slid $1.72, or 3.5 percent, to $47 Wednesday. Stockpiles of oil worldwide are large and growing, an indicator of persistent oversupply, according to data from the International Energy Agency (IEA) cited by the Wall Street Journal.

"We've been running at historically high levels on the refinery side, which is pushing out more product".

Oil headed for the longest run of weekly losses since August 2015 as OPEC member Libya restored production just as the surplus in the US showed few signs of abating.

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