OPEC now predicts USA oil production will increase by 800,000 bpd in 2017, compared with a projected decline of 150,000 bpd at the time of its December forecast ("Monthly Oil Market Report", OPEC, June 2017).
The increase in US gasoline inventories drove down RBOB futures by more than 4 percent, tugging Brent and USA crude futures lower with them, analysts said.
Oil prices fell on Wednesday after industry data showed a build in usa crude stocks and OPEC reported a rise in its production despite a pledge to cut output. USA crude was 45 cents lower at US$46.01. High stockpiles have weighed on crude prices.
Saudi Arabia has issued demands of Qatar, including ending relations with Iran, breaking all ties to the Muslim Brotherhood and expelling all members of Hamas, according to an Al Jazeera report.
The U.S. central bank cited continued U.S. economic growth and job market strength, as it proceeds with its first tightening cycle in more than a decade.
The last time this happened, in mid-2014, it was a precursor to a massive selloff in oil that dropped Brent from US$108 a barrel to about US$47 a barrel in the span of five months.
Analysts expect USA oil drilling to taper off as old hedge positions wind down, leaving smaller producers exposed to market prices at below break-even levels.
"'Whatever it takes" might be the mantra, but the current form of "whatever' is not having as quick an impact as expected", the IEA said in a reference to Saudi Arabia's promise to do "whatever it takes" to rebalance oil supply and demand.
Producers hedge by buying a variety of financial options to secure a minimum price for crude and safeguard future production.
More specifically for oil, there are signs of a slowdown in China, long the key component of fuel demand growth, as its economy slows. The oil producers' organisation predicted that world oil demand in the second half of 2017 will jump by 2 million b/d over the first half, to average 97.4 million b/d, helped by a big boost from the Americas, especially the US.
"Patience is required on the part of those looking for the rebalancing of the oil market, and new data leads us to repeat the message", the IEA said.
"The market has weakened on the API data", said David Lennox, a resource analyst at Fat Prophets in Sydney.
The EIA released its monthly report on drilling activity Monday showing that oil production from seven major US shale plays is projected to rise by 127,000 barrels a day to 5.475 million barrels a day in July from June.