Oil slips further below $80 a barrel as focus on OPEC intensifies

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Meanwhile, commercial US crude inventories rose C-STK-T-EIA by 5.8 million barrels in the week to May 18, beating analyst expectations for a drop of 1.6 million barrels, the Energy Information Administration (EIA) said on Wednesday. The dollar fell more than 0.2 per cent against a basket of currencies.

Surplus oil supplies in the world's biggest economy swelled by 5.78 million barrels last week, and gasoline inventories expanded by 1.88 million, according to the U.S. Energy Information Administration. Nearly every analyst and economist in a Bloomberg survey expected stockpiles to shrink. "The risk is to the downside right now".

Major oil producers are scheduled to meet in Vienna on June 22, 2018. Conversely, a climb above $80.50 would negate this bearish outlook.

The Organization of Petroleum Exporting Countries and its allies are set to review their production policy 22 June in a meeting in Vienna, trying to balance their desire to completely eliminate a glut in crude markets with the prospect of shortages later this year due to collapsing output in Venezuela and forthcoming U.S. sanctions to Iran.

"OPEC and Russian Federation may consider easing their production cuts before, or no later than, their joint meeting", Ole Hansen, head of commodity strategy at Saxo Bank A/S, said in a note to clients.

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Brent crude futures were trading $1.08, or 1.4 percent, lower at $78.45 a barrel as of 10:54 a.m. EDT, while USA crude lost 85 cents to $71.35 a barrel.

The price of Brent crude oil, the global benchmark outside the U.S., has now failed twice in recent days to break convincingly above the $80 per barrel level, suggesting that the market is now toppish and ready for at least a modest move lower.

Septembers ' contractual price on oil on the Shanghai global energy exchange (INE) on Friday have decreased on 1,1% - to 479,9 yuan per barrel. Refinery utilization rates rose by 0.7%age point to 91.8% of total capacity.

WTI (oil futures on NYMEX) extends its losing streak into a fourth-day today, as rising worries over the latest report that the OPEC and non-OPEC producers are considering increasing the output by 1 mln bpd, adds to the ongoing sell-off in oil.

But provided we avoid a "geopolitical shock", oil supplies should gradually rise as USA shale drillers boost output, while members of oil-cartel Opec will be unable to resist the temptation to exceed production quotas to make up for any Iranian shortfall and bolster revenues.

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