Oil Update: Oil prices continue to decline

Prices for oil witnessed a no movement or stationary day after the steep falls during the week. The prices continue to fall amidst worries over Gulf crisis and oil glut due to oversupply in the US Stockpiles.

The oil price trajectory has continued to slope downward since 25th May, the day on which OPEC cuts were announced. Despite efforts from the OPEC members to cut oil supply for the last year and then the extension has yielded no results for the oil prices.

Brent crude was at $47.86 per barrel at 0504 GMT, unchanged from its last close. It still puts Brent almost 12 percent below its opening level on May 25, when an OPEC-led pledge to cut production was extended into 2018.

U.S. West Texas Intermediate (WTI) crude was at $45.63, also virtually unchanged from the last close, but almost 11 percent below May 25.

The discipline of supply cuts from members has also been withering as the cut targets are not being implemented by some countries in a cohesive manner. The prices for crude have dropped to the lows akin to those in 4th Quarter of 2016 despite the 9 month long cuts. The worrying element in the current oil scenario of OPEC countries is the ever expanding petroleum production from US producers. The rising supply of oil from non OPEC members has altered the role of cartel to be effective and efficient in oil prices determination.

U.S. Energy Information Administration (EIA) data this week showed a surprise build in commercial crude oil stocks to 513.2 million barrels this week. Inventories of refined products were also up, despite the start of the peak demand summer season.

Asian markets are also oversupplied, with traders continuing to put excess crude into floating storage, a key indicator for a glut.

That's similar amounts to May and April, indicating that even in Asia with its strong demand growth traders is struggling to clear bloated inventories.

And more production is coming. Libya's 270,000 bpd Sharara oil field has reopened after a workers' protest and should return to normal production within three days, the National Oil Corporation said in a statement on Friday.