Oil slides as US climate withdrawal compounds glut concerns

Strong start to summer driving season pushed U.S. oil rises towards $50

Strong start to summer driving season pushed U.S. oil rises towards $50

He stated that Russian Prime Minister, Dmitry Medvedev, told him that the country was fully committed to complying with output cuts.

"We have no issues with people taking positions in the market", he said, adding that "we are focusing on fundamentals".

While US government data on Thursday showed crude inventories declined last week, rising exports and production, and a jump in the oil rig count, suggest the glut will linger.

"But my projection is that within the six to nine months' window, all things being equal, militancy remaining calm and the investment that is required is urgently done to fix the existing pipelines, we should get to the sort of figure that we had before", the minister said.

Crude oil prices have been dampened by rising USA output despite Opec production cuts.

The analyst said the U.S' decision may worsen global glut.

Global benchmark Brent crude futures LCOc1 were down 39 cents, or 0.77 percent, at $50.25 a barrel at 0039 GMT.

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West Texas Intermediate (WTI) for July delivery on Friday fell US$0.70 to settle at US$47.66 per barrel on the New York Mercantile Exchange.

Blame a combination of the weakish jobs report (138,000 new jobs created, around 45,000 less than expected and 85,000 jobs sliced off the estimates for March and April), rising USA production and President Trump's withdrawal from the Paris Climate Accord on top of fears of a persistent oversupply of oil.

"I think we will see a United States that is about to go insane in terms of producing fossil fuels", Matt Stanley, a fuel broker at Freight Services International in Dubai, said in an interview with Reuters on Friday.

Mr. Trump said in his speech that the landmark 2015 agreement imposed extremely unfair environmental principles which may weaken the United States economy, harm U.S. jobs, pressure American national supremacy and put the country at an unending inconvenience to the other countries of the world. "Demand growth has slowed somewhat recently, and with USA production growing strongly, there doesn't seem to be much room for OPEC production to grow in 2018".

Including Nigeria and Libya, OPEC oil output remained about 450,000 barrels a day higher than the target specified in the November 30 production deal, placing the group's progress to only around 66 percent toward its goal compared to last month's 90 percent.

The price of oil has fallen sharply as investors bet that President Donald Trump's decision to pull the United States out of the Paris climate agreement will increase the country's oil and gas production. Nigeria and Libya are exempted from curbing output as they seek to restore supplies hurt by internal conflicts.

Although a sharp fall of USA crude inventories could be seen as a supportive factor to oil prices, US crude production rose to 9.35 million bpd last week, up almost 500,000 bpd from a year ago.

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