Oil output at biggest Libya field said to plummet

Crude Oil

USA shale output is expected to rise again in September, according to US data issued late in the session.

"The resilience of the US shale producers and the flexibility, the ability to bring on more oil at relatively low cost and short notice, means any signs of life - as far as the price is concerned - encourages more USA shale", Atkinson said.

Brent and US crude reached two-month highs in early August but have slid over the last few days, dropping more than 2.5 percent on Monday.

WTI light sweeet crude oil was down 30 cents at $47.29 a barrel, unable to hold the $50 mark which was briefly breached earlier this month.

International Energy Agency (IEA) in its monthly oil market report indicated that it is not just Libya and Nigeria but the participating countries have produced nearly 470,000 barrels of crude per day, beyond the agreed level.

Global benchmark Brent crude futures LCOc1 were at $51.74 a barrel at 1134 GMT, down 36 cents from Friday's close.

Monday's drop in oil prices comes after both OPEC and the International Energy Agency last week said oil production from the cartel had risen in July to nearly reach 33 million barrels a day. Both Brent and WTI had reached two-month highs on August 10.

"While these producers have tried to limit their oil output, USA shale oil continues to rise", said Fawad Razaqzada, analyst at futures brokerage Forex.com.

Oil prices edged up on Wednesday, lifted by declining US crude inventories, although markets were still restrained by excess supply.

USA crude inventories probably shrank by 3.6 million barrels last week, according to the Bloomberg survey.

Most analysts are expecting figures of 3.179 million drop in crude stocks in the upcoming announcements while a total of 1.527 million barrels decline in gasoline inventories and shrink the total supplies by 620,000 barrels.

India now depends on OPEC countries for 86% of its oil imports, with Iraq, Saudi Arabia, Iran, and UAE its major suppliers.

The Commerce Department's Retail Sales report for July will be issued at 8.30 am ET.

"This is also bearish because the more DUC wells there are, the more capacity is ready to come online in the face of any sort of price rally", Tyler Richey, co-editor of the Sevens Report, told MarketWatch Monday afternoon.

Oil prices fell on Monday as a slowdown in Chinese refining raised concerns about demand in the world's second-biggest consumer, while an increase in US drilling capacity could deepen a global supply glut.

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