Oil extends gains after upbeat United States production data

Oil slides back towards 2-week lows as focus turns to US stockpile data

Oil slides back towards 2-week lows as focus turns to US stockpile data

In the meeting, OPEC and other nonmembers will discuss on how to reduce global supply glut, as crude oil prices are still subdued despite the extension of the output cut deal in May thanks to huge US shale output.

Saudi Arabia has told OPEC that it had pumped 10.07 million barrels per day in June, up by 190,000 bpd from May, and exceeding its 10.058-million-bpd production level quota under the output cut deal.

Meanwhile, Saudi Arabia, struggling to meet their fiscal goals due to the persistently low crude prices, is intending to cut oil exports by 600,000 bpd in August due to the rise in domestic consumption.

Crude oil prices remain under $50 a barrel. With U.S. oil producers leading a pick-up in rival supply, that's also higher than the 32.2 MMbpd OPEC expects will be needed in 2018. USA crude was 50 cents lower at $43.90.

Oil futures were little changed in NY, trading near $44 a barrel following a report that Saudi Arabia exceeded its agreed-upon output limits last month. West Texas Intermediate, the USA benchmark for the price of oil, was up 1.9 percent to $45.92 per barrel.

That was much more than the 2.9 million-barrel crude draw forecast in a Reuters poll but was slightly less than the 8.1 million-barrel decline reported by the American Petroleum Institute (API) on Tuesday.

US inventories have been closely watched amid market concerns that USA output from shale formations could offset OPEC's efforts to throttle back production and curb a global supply glut.

"U.S. gasoline demand may have peaked in absolute terms previous year", Bank of America Merrill Lynch said, adding it expected no tightness once the peak demand summer season was over.

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The EIA does forecast production to average 9.9 million b/d in 2018, which would mark the highest annual average production in USA history, surpassing the previous record of 9.6 million b/d set in 1970.

Brent climbed 1.2% to $48.11 per barrel.

Distillate stockpiles, which include diesel and heating oil, rose 3.1 million barrels, versus expectations for a 1.1 million-barrel increase, the EIA data showed. However, the increase in supplies from outside OPEC will accelerate, to 1.1 MMbpd, or about 2%, with most of the expansion coming from the U.S.

Libya and Nigeria are both exempt from the output-restraint deal that has been observed by other Opec members and producers outside the group since January.

That's because the government agency also cut its 2018 USA production forecast to 9.9 million barrels per day.

Hurt by these news, oil prices registered an acute drop on July 5 after their longest rally in more than five years.

Furthermore, the latest accusation of Russian intervention in the US elections further strained relations with Russia, which has a long history of tension since the Cold War era.