According to Wednesday data from the EIA, crude-oil stockpiles decreased by 1.7 million barrels in the week ended June 9, falling short of expectations for a 2.6 million barrel drop from analysts and traders surveyed by the Wall Street Journal. The IEA expects US crude production to grow by 780,000 barrels per day next year.
U.S. West Texas Intermediate crude futures fell almost 4 percent, plunging to a five-week low below $45 a barrel, following the report.
Production across OPEC rose by about 336,100 barrels per day to 32.1 million bpd, according to secondary sources, led by increases from Libya and Nigeria, which are exempt from the deal, and Iraq, CNBC reported.
The Paris-based IEA said production outside the Organizationof the Petroleum Exporting Countries would grow twice as quicklyin 2018 as it will do this year, when OPEC and 11 partnernations have restrained output. "The market remained in technically oversold territory with futures trading down as much as 19% from highs in mid-April". Prices are down 1.6 percent this week.More news: Congressman's shooting first test for Trump-era gun debate
However, prices for both benchmarks are still down by around 13 percent since late May, when producers led by OPEC extended a pledge to cut production by 1.8 million barrels per day by an extra nine months until the end of the first quarter of 2018.
For oil market players, "the fact that consumption remains sluggish at a time when demand should be growing creates a reason to sell", said Satoru Yoshida of the Rakuten Securities Economic Research Institute.
The impact of OPEC-led cuts has been undermined by rising US oil output.
The US Government's Energy Information Administration has forecasted domestic output growth to 460,000bpd this year revising the earlier prediction of a decline of 80,000bpd in December.
However, that optimism seems to be fading amid higher production from the United States and reports of impatience within the OPEC with lower oil price. More specifically for oil, there are signs of a slowdown in China, long the key driver in fuel demand growth, as its economy slows down and refiners have produced far too much fuel for the market to consume, forcing a slowdown in activity.