Oil set for longest run of weekly losses since 2015 amid glut

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However, prices are still down by almost 13 percent since May 25, when the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other oil producers agreed to extend production cuts.

Crude prices came under pressure Wednesday after official data showed global oil stocks had increased, despite attempts by major producers to rebalance the market.

As of mid-morning Wednesday, U.S. Brent crude was down $1.53 a barrel, or 3.1%, at $47.19.

In a sign of the continuing supply overhang, traders are again hiring oil tankers to store unsold crude while they wait for higher prices.

The International Energy Agency (IEA) said this week that oil supplies next year would still outpace demand despite consumption hitting 100 million bpd for the first time. "This looks challenging", AB Bernstein said.

Oil prices fell by one percent early on Wednesday after data showed a build in USA crude stocks and OPEC reported a rise in its production despite its pledge to cut back.

The US Government's Energy Information Administration has forecasted domestic output growth to 460,000bpd this year revising the earlier prediction of a decline of 80,000bpd in December.

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Brent has dropped back below $50 since the OPEC meeting.

However, continuing production growth in many non-OPEC countries is expected to moderate the pace of global liquid fuels inventory draws in 2017.

The IEA, a Paris-based body that advises oil-consuming states on energy matters, said in its monthly oil report it expects production in non-OPEC states like the U.S.to grow 700,000 barrels daily this year.

Bottom line, the IEA report hints that the oil market will continue to struggle and American drillers will play a bigger role in the oil market's "drama", CNBC noted. Even so, output from US shale and other non-OPEC sources will essentially capture the entire gain.

Benchmark U.S. crude prices have already declined by $9 per barrel or about 16 percent from their recent peak in the middle of February.

But most producers have only hedged a relatively low proportion of output for 2018 so far, and the patience of private equity investors will not last forever.

This suggests global oversupply will persist for a while. The U.S. rig count rose by 8 to 741, extending a year-long drilling recovery to the highest level since April 2015.

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