Oil prices eased on Thursday as US fuel inventories rose despite efforts by OPEC to cut production and tighten the market.
US West Texas Intermediate (WTI) crude futures were trading at $50.98 per barrel at 0647 GMT, down 32 cents, or 0.6 per cent, from their last settlement, reports Reuters.
Brent crude futures, the international benchmark for oil prices, were at $56.58, down 36 cents, or 0.6 per cent, from the previous close.
Starting this year, the OPEC and other producers including Russia agreed to cut output by 1.8 million barrels per day (bpd) to prop up prices.
The OPEC-led deal helped lift oil from the $30 to $40 per barrel range in late 2016/early 2017. But traders say supplies remain ample despite these cuts, thanks in large part to surging US production.
As a result, OPEC is widely expected to extend the cuts beyond the current expiry date of end-March 2018.
In Venezuela, an OPEC-member with huge oil reserves, an economic and political crisis is threatening production, and the government is also at loggerheads with the Trump administration.
With rising US production undermining OPEC’s efforts to tighten the market, inventories remain high.
In fact, US crude stocks rose by 3.1 million barrels to 468.5 million barrels last week, according to industry group the American Petroleum Institute (API).
Official US fuel inventory data is due to be published on Thursday by the Energy Information Administration (EIA).
“Our updated global supply-demand balance indeed shows peak stock draws in 3Q17,” Goldman Sachs said in a note to clients.
The US bank said that current oil supply and demand fundamentals meant it expects Brent to average $58 per barrel in 2018.
