Oil losses continue after falling into bear market

Oil prices hit seven-month lows on global oversupply

Oil Prices Hit Seven-Month Lows As Global Oversupply Persists

USA crude-oil prices on Tuesday retreated in to bear-market territory, defined as a drop of at least 20% from a recent peak, as the industry continues to be dogged by oversupply concerns.

Brent crude futures fell $1.34 to $44.68 a barrel.

Libya's oil production climbed to its highest level in four years, which added to the glut of supply in the global crude market, according to experts.

Oil has extended its decline below US$44 a barrel to a nine-month low on concerns relentless supply gains from the United States, as well as renewed output from Libya, is offsetting cuts by Opec and partners including Russian Federation.

Libyan oil production rose by more than 50,000 barrels per day (BPD) to 885,000 barrels per day, after ending a dispute with a German oil company that opened two more fields, according to a Reuters source.

In Libya's case, official confirmation of a 900,000 bpd production level - deemed a four-year high - is awaited, while Nigerian exports are tipped to exceed 2m bpd by August; likely to be the highest on data aggregators' records in almost 17 months, according to Reuters.

In their meeting last November, OPEC members unanimously agreed on the oil price of 60 US dollars per barrel, hence they agreed to cut output by 1.2 million bpd down to 32.5 million bpd for the first six months of 2017.

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"Given the expectation that you'll see higher production levels in several areas of the world, it's going to offset all they're taking off the market", said Gene McGillian, manager of market research at Tradition Energy.

Ahead of weekly USA inventory reports, US crude oil stocks were forecast to have fallen for the second straight week, while gasoline supplies were seen unchanged after last week's data showed an unexpected build that weighed down the market.

"?The question is whether OPEC will respond with further cuts or whether it needs to look again at its macro strategy for addressing low prices", Michael Burns, oil and gas partner at law firm Ashurst, said.

Last week, US drillers increased the oil rig count for the 22nd straight week to the highest level since April 2015, according to Baker Hughes.

Oil prices recovered after falling into a bear market amid speculation rising US output will blunt OPEC-led efforts to trim a global glut.

At the same time, an increase in the number of drilled-but-uncompleted wells could drive oil prices down further, analysts said. EIA estimates showed that there were 5,946 drilled-but-uncompleted oil wells in the U.S.at the end of May, the most in three years.

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