Oil prices tumble on U.S. inventories data

Increasing U.S. output is proving a constant source of irritation to attempts by the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers to curb output and sustain a rally in prices in a market that has been oversupplied since mid-2014.U.S. crude oil production has climbed to 9.24 million barrels per day, according to the latest Energy Information Administration data, making it the world's third-largest producer after Russian Federation and Saudi Arabia. OPEC will decide at a meeting on May 25 whether to prolong the cuts it pledged to make starting in January, he said.

"We are optimistic the policy measures have already placed us on the path of recovery", Barkindo said in a speech.

"Our collective action will continue to prove effective and bring the results we are seeking".

OPEC agreed to cut output by 1.2 million barrels a day for the first six months of 2017, while 11 other non-OPEC countries including Russian Federation agreed to limit supply.

Global benchmark Brent crude futures fell 11 cents, trading at $55.25 a barrel, while Brent touched $54.76 intraday, its lowest since April 7.

The energy minister of OPEC member the United Arab Emirates said on Tuesday he saw healthy oil demand growth this year and believed inventories would fall. Including Nigeria and Libya, the two members exempt from cuts, output by all 13 Opec members in March fell to 31.93 million bpd, down 150,000 bpd from February.

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But oil at above $50 a barrel has, in turn, attracted higher-cost producers in the United States back to the market, and frantic American drilling will push non-OPEC supply to surprisingly high levels throughout the year, the IEA predicted.

Oil prices were little changed on Thursday in a seesaw trading session, as investors weighed rising USA production against comments from leading Gulf oil producers that an extension to OPEC-led supply cuts was likely.

The head of OPEC says oil producers are seeking sustainable stability in crude markets as they consider whether to extend output curbs.

Kuwait was the first country to call for extending the production cuts beyond June. "They are not cutting, but they aren't increasing output from what was agreed on".

Julian Lee, oil strategist for Bloomberg First Word, notes that "the grand re-balancing of supply and demand has yet to take place" and that "the OPEC output cut was also meant to usher in a period when demand would start running ahead of supply, and when inventories would be reduced".

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