Oil prices sank more than 3 percent to their lowest in more than five weeks on Wednesday (June 14) following U.S. data showing an unexpectedly large weekly build in USA gasoline inventories and International Energy Agency (IEA) data projecting a big increase in non-Opec output in 2018.
If the shale boom had continued, with USA production growing at more than 1 million bpd per year, OPEC's share would have fallen even further in 2015 and 2016 (http://tmsnrt.rs/2srWKEf). The spot price of benchmark West Texas Intermediate (WTI) crude oil was $46.10 per barrel as of June 12, according to the U.S. Energy Information Administration (EIA).
OPEC's crude oil production target will remain at 32.5 million barrels per day through the end of the first quarter of 2018, the EIA said.
Oil has declined nearly 8 percent this month amid speculation increasing USA supplies will offset production curbs by the Organization of Petroleum Exporting Countries and its allies including Russian Federation.More news: Erendira Wallenda Wows World With Niagara Falls Stunt
That decline pushed both contracts to their lowest since May 5, driving them into technically oversold territory.
The rise in domestic oil production also contributed to the decline in oil prices.
This followed a plunge in NY futures the previous day, with West Texas Intermediate ending the session under the $45 mark.
Crude edged higher on Friday, but prices remain near November lows, as rising USA output is countering production cuts agreed to by OPEC members.More news: Palestinians deny IS claim for deadly attack on Israeli
In a report on Wednesday, the International Energy Agency said rising US output will contribute to supply growth exceeding demand growth in 2018.
The average price of regular gasoline is $2.34 per gallon nationwide, according to the American Automobile Association. In May, OPEC and 10 other crude-oil producers agreed to extend the deal to cut output by 1.8 million barrels a month until next March.
OPEC said on Tuesday a long-awaited rebalancing of the oil market was under way at a "slower pace" and reported that its own output in May jumped due to gains in nations exempt from a pact to reduce supply.
Rising U.S. oil output has undermined the impact of OPEC-led cuts.More news: Portugal awaits foreign aid to help battle fires
"Demand is not as strong as expected and supply continues to increase despite softer prices", said Michael McCarthy, a chief market strategist at CMC Markets in Sydney.
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