Oil Set for Longest Run of Weekly Losses Since 2015 Amid Glut

Oil prices climbed up on June 16 but remained near six-month lows, held down by an ongoing supply overhang that persists despite an OPEC-led effort to cut production and prop up crude markets.

The U.S. oil boom will keep piling on the pain for OPEC well into next year.

"There may be a surprise to the upside again", the agency said in reference to Russia's oil output.

Reformulated blendstock gasoline futures 1RBc1 dropped 3.4 percent to $1.449 a gallon as of 10:59 a.m. EDT (1459 GMT). Adding to the glut is an ongoing rise in US production driven by shale drillers, which has pushed USA output up by 10 percent over the previous year to 9.3 million bpd, not far off top exporter Saudi Arabia.

Oil has declined nearly 8 percent this month amid speculation that rising U.S. supplies will offset output curbs by the Organization of Petroleum Exporting Countries and its allies, including Russian Federation.

Analysts said both benchmarks were dragged lower by a bigger than 4 percent drop in U.S. gasoline futures after the U.S. Energy Information Administration (EIA) reported a 2.1 million-barrel increase in gasoline inventories last week.

The International Energy Agency mirrored OPEC's sentiments in its own monthly report, saying stronger USA crude oil production, which could increase faster than expected, is offsetting OPEC's production aim.

The crude oil bulls had been waiting for the USA driving season to spur gasoline demand, which was expected to increase the drawdown in crude oil inventory.

Rising U.S. oil output, particularly from shale drillers, is contributing to the ineffectiveness of the OPEC-led cuts, according to Reuters. New non-OPEC output next year will be more than enough to meet demand growth, the International Energy Agency said Wednesday in its first forecast for 2018.

It is important to note that gasoline stockpiles rose by a surprising 2.1 million barrels (considering the decline), compared to an expectation of 457,000 gallon drawdown as, it seems, Americans are spending more time traveling to vacations within North America. Prices slid $1.72, or 3.5 percent, to $47 Wednesday. Brent traded at a premium of $2.35 to August WTI.

A report earlier this week found growing oil supply is set to outpace demand next year as production outside Opec is expected to grow twice as quickly in 2018 as it will this year.

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