Oil prices have fallen amid increased inventories of fuel, as well as due to improving industry efficiency.
Brent crude futures LCOc1 declined 19 cents and traded at $48.23 per barrel, while the US West Texas Intermediate (WTI) crude futures CLc1 slipped 15 cents and traded at $45.93 per barrel, Reuters reported.
A group of oil producers including Russia and the Organization of the Petroleum Exporting Countries (OPEC) agreed in November last year to reserve output of about 1.8 million barrels per day (bpd) between January this year and March next year in order to rebalance the market.
US investment bank Jefferies was quoted by the news agency as saying: "OPEC compliance with production cuts slipped to 98% in June, but more importantly output from exempt (from cutting) members Libya and Nigeria is currently about 700,000 bpd higher than at the time of the November OPEC agreement, offsetting about 60% of the OPEC cuts."
Over the past year, oil production in the US has increased by more than 10% to 9.4 million bpd.
Research and brokerage firm Sanford C Bernstein stated that OECD inventories are likely to finish higher during the first half of this year.
In order to eliminate the inventory overhang the oil cartel is required to cut deeper, Bernstein added.
According to Goldman Sachs, due to increasing cost efficiency from shale drillers in the US, the crude oil price outlook remained weak.
In its latest oil market report, the International Energy Agency (IEA) said that there are two hitches this month, which are a dramatic recovery in oil production from Libya and Nigeria, and a lower rate of compliance by OPEC with its own output agreement.