Oil prices dipped on Wednesday on renewed concerns about the efficacy of OPEC-led production cuts due to rising tensions within the export group over Qatar and growing U.S. output.
Brent crude prices LCOc1 were at $49.70 per barrel at 1351 GMT, down 42 cents. Brent is about 8 percent below its open on May 25, when OPEC and other producers agreed to extend oil output cuts through to the first quarter of 2018.
U.S. light crude prices CLc1 were at $47.69 per barrel, down 50 cents.
The U.S. Energy Information Administration (EIA) said on Tuesday U.S. crude oil production C-OUT-T-EIA could hit a record 10 million bpd next year, up from 9.3 million bpd now and almost equaling top exporter Saudi Arabia.
In the nearer term, with fuel production and consumption largely balanced according to the EIA, the market is focused on still bloated inventories.
In the United States, official inventory data from the EIA will be published on Wednesday, with expectations of a fall in stockpiles. The American Petroleum Institute said on Tuesday crude inventories fell by 4.6 million barrels last week.
The Organization of the Petroleum Exporting Countries has pledged to cut almost 1.8 million barrels per day (bpd) to help reduce global inventories to their five-year average.
“The market just has to be patient,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets, adding that a gradual reduction in inventories would support prices without the kind of price spike that would drive U.S. shale production higher.
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