Oil slides as US climate withdrawal compounds glut concerns

The Dakota Access Pipeline began flowing this week through the thousand-mile route from North Dakota to Illinois

Futures slid 1.5 percent in NY.

While OPEC and its partners agreed on May 25 keep output constrained through to early 2018 in a bid to clear a global glut, the Rosneft CEO said non-participants such USA shale are using the deal to strengthen their market position.

That is because crude production in the United States, which is not participating in the cuts, has jumped by over 10 percent since mid-2016 to 9.34 million bpd, close to levels by top producers Saudi Arabia and Russian Federation. "His comments certainly registered with the market".

The real estate report, issued by SAK Holding Group's Market Watch Bureau, said the real estate sector "is one of the big beneficiaries" of the decision to cut down oil production.

As OPEC and other major producers cap their production, analysts see US crude output continuing to trend higher as long as global prices stay above $40, a threshold at which many large USA oil companies can produce at a profit.

U.S. West Texas Intermediate crude CLc1 futures fell 95 cents to $47.41 per barrel. Total volume traded was about double the 100-day average. And, this very steep growth comes with United States oil prices locked below the price most analysts estimated as a minimum to grow U.S. oil production.

Benchmark Brent crude futures LCOc1 were trading at $49.67 a barrel at 0849 GMT, down 96 cents from the previous close.

July WTI futures consolidated around $47.15 p/b at the United States open with August Brent trading around $49.40 p/b.

A week ago, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC members met in Vienna to roll over the output cut deal to reduce 1.8 million barrels per day (bpd) until the end of next March. While U.S. stockpiles have edged lower, rising American production and drilling is fanning concerns that OPEC's efforts to trim a global glut will be hampered. Inventories fell by 6.43 million barrels last week, more than double the median estimate in a Bloomberg survey.

The rise in production has been driven by a record 20th straight rise in oil drilling for new production, with the rig count rising by 11 in the week to June 2, to 733, the most since April 2015.

Even if OPEC extends their output accord for all of next year, it may only succeed in stopping further stockpile increases, he said.

Last week, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said test loadings had begun at the Forcados terminal, adding, "We still need to fix a lot of the secondary infrastructure that was damaged by militancy".

The President of the OPEC Conference and minister of energy of Saudi Arabia, Khalid Al- Falih, had said that the extension was necessary to further consolidate the gain by all stakeholders and the period would allow the market to achieve the five year average for stocks.

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