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Brent crude futures <LCOc1> were down 61 cents at $50.02 per
barrel by 2:00 p.m. (1800 GMT), while U.S. West Texas
Intermediate crude <CLc1> futures fell 62 cents to $47.74 per
barrel.
Both contracts were on track for a weekly loss of about 4
percent.
Market analysts are troubled by a growth in U.S. crude
production that is straining efforts from the Organization of
the Petroleum Exporting Countries to reduce global oversupply.
U.S. drillers this week added 11 rigs, in a record stretch of 20
straight weeks of additions, data from energy services company
Baker Hughes showed. [RIG/U]
Trump's withdrawal from the Paris agreement, the landmark 2015
global pact to fight climate change, drew condemnation from
Washington's allies and many in the energy industry - and
sparked fears that U.S. oil production could expand more rapidly
than it is currently.
“Trump seems to be removing any barriers he can find that would
obstruct growth of crude oil or natural gas,” said Stewart
Glickman, energy equity analyst at CFRA in New York.
"It’s kind of ironic because by doing that you’re encouraging
more volumes to come out of the ground."
U.S. crude production last week was up by nearly 500,000 barrels
per day (bpd) from year-earlier levels and hit 9.34 million bpd,
its highest since August 2015.[EIA/S]
U.S. output is expected to keep rising, as the U.S. Energy
Information Administration forecasts production of about 10
million bpd next year.
Igor Sechin, chief of Russia's largest oil producer, Rosneft,
said U.S. producers could add up to 1.5 million bpd to world oil
output next year.
Last week OPEC and some non-OPEC producers extended a deal to
cut 1.8 million bpd in supply until March 2018. Oil prices are
down around 10 percent since the extension, and OPEC officials
have since suggested they may deepen the cuts.
Investors have been edgy due to the slow decline in inventories
worldwide. U.S. inventories, however, fell 6.4 million barrels
last week, their eighth straight weekly drawdown. "That's
relatively higher than the average draws we’ve seen, so you
would have thought that crude would have fared a little better,"
said CFRA's Glickman.
(Additional reporting by Libby George and Sabina Zawadzki in
London and Jane Chung in Seoul; Editing by Marguerita Choy and
Adrian Croft)
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