Oil prices on Thursday, June 15, to six-week low, under pressure from high global inventories and doubts about OPEC’s ability to implement agreed production cuts.
Brent crude oil fell 30 cents to $46.70 a barrel, its weakest since May 5 and just above six-month lows, before recovering a little to trade around $46.90 by 0945 GMT.
U.S. light crude was down 15 cents at $44.58, also not far off six-month lows. Both crude benchmarks have lost all the gains made at the end of last year after the Organization of the Petroleum Exporting Countries agreed with other big producers to cut output in an effort to prop up prices.
OPEC and its allies have promised to restrict output until at least the end of the first quarter of next year to try to drain surplus supply.
But inventories are near record highs in many parts of the world, and many traders expect further price falls.
“The market is in trouble,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.
Crude prices have fallen about 12 percent since May 25, when OPEC agreed to extend its output limits into next year.
Despite the deal, some OPEC members, including Nigeria and Libya, have been exempt from cutting and their rising output is seen to be undermining efforts led by Saudi Arabia.
OPEC’s pledge was to cut some 1.2 million bpd, while other producers including Russia agreed to bring the total reduction to almost 1.8 million bpd.
But production in the United States, which is not part of the deal, has jumped 10 percent over the past year to 9.33 million bpd, Reuters reports.
