Oil is poised for its biggest weekly drop in four weeks amid questions over the effectiveness of OPEC’s deal to help rebalance the market.
Futures slid 1.7 percent in New York and Brent crude in London traded below the key $50-a-barrel level.
Russia’s most powerful oil boss said output curbs by OPEC and its partners probably won’t succeed over the long term as U.S. shale fills the supply shortfall.
While U.S. government data released on Thursday showed that crude inventories declined last week, rising exports and production suggest the glut is lingering.
Oil slid last week after the agreement by the Organization of Petroleum Exporting Countries and its allies to prolong output curbs for nine months disappointed some investors hoping for more.
While U.S. stockpiles have edged lower, rising American production and drilling is sowing doubt over OPEC’s efforts to trim a global glut.
Again Capital LLC partner John Kilduff said: “There were some stark comments from the Rosneft CEO who said that there is a plan by producers to flood the market with oil.
“His comments certainly registered with the market. As you look back now at the deal, it looks increasingly lame.”
West Texas Intermediate for July delivery fell 82 cents to $47.54 a barrel at 9:31 a.m. on the New York Mercantile Exchange.
Total volume traded was about 74% above the 100-day average. Prices are down 4.6% this week, the biggest weekly decline since the week ended May 5.
Brent for August settlement fell 84 cents, or 1.7%, to $49.79 a barrel on the London-based ICE Futures Europe exchange.
Front-month prices are down 4.5% this week. The global benchmark crude traded at a premium of $2.03 to August WTI.
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