Oil prices have declined due to rising supplies in the US and over growing concerns that the Organization of the Petroleum Exporting Countries (OPEC) could increase output.
Benchmark Brent crude oil LCOc1 has dropped 35 cents to trade at $75.53 per barrel, while US light crude CLc1 decreased by 40 cents to reach $65.96, Reuters reported.
Since January last year, OPEC, along with other producers, including Russia, has been voluntarily enforcing supply cuts to remove excesses and prop up prices.
Their efforts have been successful to an extent, as prices have increased by around 60% over the last year.
On 12 June, the producer group stated that the oil market could face uncertainties in the second half of this year and there could be potential downside risks on the demand side.
OPEC is scheduled to meet in Austria later this month to discuss a future course of action in terms of production.
Futures brokerage FXTM analyst Lukman Otunuga was quoted by the news agency as saying: “The prospect of easing supply curbs from OPEC-led producers continues to be reflected in oil’s overall depressed price.”
However, Dutch bank ING noted that some OPEC members would find it hard to emulate October 2016 production levels.
Meanwhile, data released by oil and natural gas trade association the American Petroleum Institute indicated that US crude oil stockpiles climbed 830,000 barrels in the week ending 8 June to reach 433.7 million.
The jump in inventories is a reflection of growing US crude oil production C-OUT-T-EIA, which soared to a record 10.8 million barrels per day.
Other two major suppliers Russia and Saudi Arabia have also stepped up production, with the former raising output above the 11 million barrels per day mark this month and the latter pushing production back above ten million barrels per day.