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UPDATE 2-Oil prices fall on OPEC output increase, rising U.S. crude stocks

Published 14/06/2017, 05:03 pm
© Reuters.  UPDATE 2-Oil prices fall on OPEC output increase, rising U.S. crude stocks
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* OPEC's May oil output rises by 336,000 bpd to 32.14 mln bpd

* API says U.S. crude stocks rise 2.8 mln barrels to 511.4 mln

* Global oil demand growth slows, especially in key market China

* OPEC exports in 2017 vs 2016: http://tmsnrt.rs/2sZPdJT (Adds chart link, updates prices)

By Henning Gloystein

SINGAPORE, June 14 (Reuters) - Oil prices fell on Wednesday after data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite its pledge to cut back on output.

Brent crude futures LCOc1 were at $48.41 per barrel at 0652 GMT, down 31 cents, or 0.6 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $46.10 per barrel, down 36 cents, or 0.8 percent.

Crude prices have fallen by more than 10 percent since late May, pulled down by an supply glut that persists despite a move led by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by almost 1.8 million barrels per day (bpd) until the end of the first quarter of 2018.

OPEC's own compliance with the cuts has been questioned, and the producer group said in a report this week that its output rose by 336,000 bpd in May to 32.14 million bpd. bank said in a note to clients that prices were "under pressure earlier in the day after a report from OPEC showed that its production had increased."

Adding to the supply surplus is rising U.S. production from shale drillers that has pushed U.S. output up by 10 percent over the last year to 9.3 million bpd, not far below levels by top exporter Saudi Arabia. C-OUT-T-EIA

"The outlook for oil hinges on the effectiveness of the OPEC cuts relative to the supply increases from U.S. shale," said William O'Loughlin, analyst at Australia's Rivkin Securities.

Data from the American Petroleum Institute showed on Tuesday that U.S. crude stocks rose by 2.8 million barrels in the week to June 9 to 511.4 million, compared with expectations for a decrease of 2.7 million barrels. API/S

With supplies plentiful, strong demand is needed to support the market, but there are signs of a slowdown.

Global energy demand grew by 1 percent in 2016, a rate similar to the previous two years but well below the 10-year average of 1.8 percent, BP BP.L said in its benchmark Statistical Review of World Energy on Tuesday. specifically for oil, there are signs of a slowdown in China, long the key component of fuel demand growth, as its economy slows. The nation's refiners have produced too much fuel for it to consume, forcing a drop-off in activity. demand is slow ... so we have a build-up of crude in Asia where demand seems to have slowed for now," said Oystein Berentsen, managing director for oil trading company Strong Petroleum. COLUMN-OPEC's simple problem. Despite Saudi cuts, it's shipping more oil: Russell

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