Oil Steady as Output Balances Demand

+ADw-div+AD4APA-img src+AD0AIg-https://images.worldenergynews.com/images/maritime/w800/image-credit-87169.jpeg+ACI class+AD0AIg-ff-og-image-inserted+ACI /+AD4APA-/div+AD4APA-p+AD4APA-em+AD4APA-strong+AD4-IEA sees supply gap if demand outpaces output increases.+ADw-/strong+AD4APA-/em+AD4APA-/p+AD4

+ADw-div+AD4-Oil prices fell on Wednesday, hit by rising supplies in the +ADw-a href+AD0AIg-https://www.worldenergynews.com/news/energy/united-states+ACIAPg-United States+ADw-/a+AD4 and expectations that producer group OPEC could relax voluntary output cuts.+ADw-/div+AD4

+ADw-p+AD4-Brent crude was down 15 cents at +ACQ-75.73 a barrel by 1200 GMT. U.S. light crude was 35 cents lower at +ACQ-66.01.+ADw-/p+AD4

+ADw-p+AD4-The Organization of the Petroleum Exporting Countries and some non-OPEC producers, including Russia, started withholding output in 2017 to reduce a supply overhang and prices have risen by around 60 percent over the last year.+ADw-/p+AD4

+ADw-p+AD4-The outlook for the oil market in the second half of this year is uncertain, analysts say, and OPEC argues there are downside risks to demand.+ADw-/p+AD4

+ADw-p+AD4-OPEC and other producers will meet on June 22-23 in Vienna to discuss future production.+ADw-/p+AD4

+ADw-p+AD4AIg-More oil from OPEC+ACs is the base case,+ACI said Bjarne Schieldrop, analyst at Swedish bank SEB.+ADw-/p+AD4

+ADw-p+AD4AIg-Saudi Arabia and Russia have already started to lift production,+ACI he said. +ACI-Unofficial sources have said Russia will propose to return production back to the October 2016 (level), i.e. removing the cap altogether over a period of three months.+ACIAPA-/p+AD4

+ADw-p+AD4-Lukman Otunuga, analyst at brokerage FXTM, said higher oil production and forecasts of more to come were already undermining prices:+ADw-/p+AD4

+ADw-p+AD4AIg-The prospect of easing supply curbs from OPEC-led producers continues to be reflected in oil’s overall depressed price.+ACIAPA-/p+AD4

+ADw-div+AD4-U.S. crude +ADw-a href+AD0AIg-https://www.worldenergynews.com/news/energy/oil+ACIAPg-oil inventories+ADw-/a+AD4 rose by 830,000 barrels in the week to June 8, to 433.7 million, the American Petroleum Institute said on Tuesday.+ADw-/div+AD4

+ADw-p+AD4-Rising U.S. stocks partly reflect a surge in U.S. crude production +ACY-lt+ADs-C-OUT-T-EIA+ACY-gt+ADs, which has jumped by almost a third in the last two years to a record 10.8 million barrels per day (bpd).+ADw-/p+AD4

+ADw-p+AD4-With output in Russia rising back above 11 million bpd in June and Saudi production climbing to more than 10 million bpd, supplies from the top three producers are increasing.+ADw-/p+AD4

+ADw-p+AD4AIg-With rising production from U.S. shale adding to oil’s woes and reviving oversupply concerns, further downside could be a possibility in the short to medium term,+ACI Otunuga said.+ADw-/p+AD4

+ADw-p+AD4-Official U.S. production and inventory data is due to be published on Wednesday by the Energy Information Administration.+AKAAPA-/p+AD4

+ADw-p+AD4APA-em+AD4-By Christopher Johnson+ADw-/em+AD4APA-/p+AD4-

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