Oil prices recovered from lows, but stayed near their lowest level in three weeks as concern over rising production in the U.S. and elsewhere dampened sentiment.
Data from the U.S. Energy Information Administration showed that total domestic crude production edged up by 79,000 barrels a day to 9.5 million barrels a day last week, its highest level since July 2015.
Crude oil inventories fell by 8.9 million barrels, according to the EIA figures, the seventh weekly decline in a row. Oil prices have been under pressure in recent weeks as concern over rising U.S. shale output canceled out production cuts by OPEC and non-OPEC members.
OPEC and 10 producers outside the cartel, including Russia, agreed since the start of the year to slash 1.8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market.
However, so far, the deal has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in U.S. shale output.
Courtesy: Religare Broking