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Benchmark Brent crude oil fell $1.07 to a low of $71.83 a barrel
before recovering a little to trade around $71.90 by 1045 GMT.
On Wednesday, Brent hit a three-month low of $71.19. U.S. light
crude was 85 cents lower at $67.91.
Brent has fallen almost 9 percent from last week's high above
$79 on emerging evidence of higher production from Saudi Arabia
and other members of the Organization of the Petroleum Exporting
Countries, as well as Russia and the United States.
"The outlook remains negative," said Robin Bieber, technical
analyst at London brokerage PVM Oil Associates.
The U.S. Energy Information Administration said on Wednesday
U.S. crude production had reached 11 million barrels per day
(bpd) for the first time. The country has added nearly 1 million
bpd in production since November, thanks to rapid increases in
shale drilling.
Even higher U.S. production is likely, Rystad Energy said.
"We are still bullish on U.S. shale, though we expect to see a
temporary plateau in 2019 due to the bottlenecks of pipelines
and, indeed, manpower and drivers," said Yosuke Uehara,
vice-president at Rystad Energy.
A sharp jump in U.S. crude oil inventories also added to the
bearish tone in the market. U.S. crude stocks rose by 5.8
million barrels last week, compared with a forecast for a
decline of 3.6 million barrels.
U.S. gasoline inventories dropped by 3.2 million barrels last
week, while distillate stockpiles, which include diesel and
heating oil, declined by 371,000 barrels, the EIA said.
A Reuters poll taken before the data release had forecast
gasoline stocks would be unchanged and distillate stockpiles
would show a build of around 900,000 barrels.
Meanwhile, OPEC and non-OPEC producers cut oil output in June by
20 percent more than agreed levels, compared with 47 percent in
May, two sources familiar with the matter told Reuters on
Wednesday.
Saudi Arabia boosted production sharply last month, raising
crude shipments to world markets by 390,000 bpd to 7.6 million
bpd, Kpler tanker-tracking data showed. That was the biggest
increase since the end of 2016, according to the International
Energy Agency [IEA/M].
A Reuters survey of OPEC production showed Saudi output at a
near record, up 700,000 bpd at 10.70 million bpd. [OPEC/O]
(Reporting by Christopher Johnson in London and Aaron Sheldrick
in Tokyo; Editing by Dale Hudson and Jan Harvey)
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