US Stockpile Keeps Oil Prices Down

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US oil fell 5 pct to under $46 a barrel after the nation's stocks unexpectedly increased.

U.S. crude production has jumped over 10 percent since mid-2016 to 9.34 million barrels per day (bpd), levels close to top producers Russian Federation and Saudi Arabia.

USA crude stockpiles, however, have consistently fallen for eight straight weeks, which had prompted some to suggest that the long-awaited effects from OPEC efforts to reduce world supply were materializing.

The department's Energy Information Administration forecast output would surge to the historic level in 2018 after last month projecting the country would produce just shy of 10 million barrels a day next year. The American Petroleum Institute said on Tuesday crude inventories fell by 4.6 million barrels last week.

Global oil prices turned lower Thursday, after posting their sharpest fall since early March overnight on an unexpected build in US crude inventories last week.

Crude oil prices remained under pressure in Wednesday trading as geopolitical issues in the Persian Gulf lead to questions about OPEC unity.

Traders said the market was supported by heightened political tensions in the Middle East and by signs of a gradual drawdown of bloated fuel inventories in the United States.

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Last year OPEC announced a momentous deal between its member nations and some non-OPEC producers to reduce their oil output.

"Qatar is. committed to the supply cut decision and its compliance ratio ranges between 93 and 102 percent", he said.

Moreover, data from industry group the American Petroleum Institute had suggested on Tuesday that USA crude inventories fell by 4.6 million barrels.

Still, Standard Chartered analysts said their market balance projections indicated a 1.4 million barrels a day global supply deficit in the second half of the year, even allowing for a rapid increase in United States output. But tensions within the Organization of the Petroleum Exporting Countries could potentially impact on an agreement to cut production in order to support global prices.

Saudi Arabia and UAE are OPEC's major crude exporters, with a much more significant impact on global oil prices.

Benchmark Brent crude oil was down 29 cents a barrel at $49.18 by 11:18 a.m. EST (1518 GMT), down around 8 percent from its level before OPEC and its non-OPEC allies said they were extending cuts until March 2018.