Oil prices dropped to seven-month lows on Wednesday, June 21, set for its largest price fall in the first half of any year for the past two decades, as investors discounted evidence of strong compliance by OPEC and non-OPEC producers with a deal to cut global output.
August Brent crude futures LCOc1 were down 12 cents at $45.85 a barrel by 0838 GMT, after falling nearly 2 percent in the previous session to their lowest settlement since November.
U.S. crude futures CLc1 for August were down 7 cents at $43.44, having hit their lowest since September on Tuesday, Reuters reports.
So far this year, oil has lost 20 percent in value, its worst performance for the first six months of the year since 1997.
Compliance with an agreement by the Organization of the Petroleum Exporting Countries and other producers to cut output by 1.8 million barrels per day from January reached its highest in May since the curbs were agreed last year.
“The slide in oil prices seems to be unstoppable,” said Julius Baer commodities research analyst Carsten Menke.
Data from the American Petroleum Institute on Tuesday showed U.S. crude stockpiles last week had dropped more than forecast. Gasoline and distillate inventories rose.
A government report on inventories is due at 10:30 a.m. EDT (1430 GMT) on Wednesday and the official figures often differ sharply from those of the industry group.
OPEC and non-OPEC oil producers’ compliance with the output deal reached 106 percent in May, a source familiar with the matter said on Tuesday.
OPEC compliance with the curbs was 108 percent, while non-OPEC compliance was 100 percent, the source said. Another source confirmed compliance by all producers in May was 106 percent.
