Oil prices slide amid glut concerns, U.S. withdrawal from climate deal

Oil prices rose on Thursday, rallying from three-week lows after industry data showed a big draw in USA crude stocks, suggesting that the world's largest oil market could be tightening faster than expected. Crude rose 4 cents a barrel Thursday to settle at $48.36 a barrel in NY.

In the same period Brent rose more than 7.5%while WTI gained 10.10%.Oil analysts have grown more downbeat about the outlook for crude and expect prices to average around $55 a barrel this year even after OPEC and its partners agreed to restrain production into 2018, a Reuters poll of analysts showed on Friday.

The U.S. Energy Information Administration (EIA) report on stockpiles is due at 11:00 a.m. EDT (1500 GMT) on Thursday, delayed by a day because of the Memorial Day holiday on Monday.

"Oil prices dropped below 50 this morning as [the] continued global oil glut seems to outweigh bullish USA oil inventory reports and Trump exiting the 2015 Paris climate agreement", said Michael Poulsen, oil risk manager at Global Risk Management.

Oil prices fell to a three-week low on Wednesday on news that Libyan output was recovering from an oilfield technical issue, fuelling concerns that OPEC-led output cuts to reduce global inventories were being undermined by producers outside the deal.

On the possibility for crude prices to remain in 55 to 60 dollars per barrel if the same trend is pursued, the official said decisions are made based on market analysis and conditions though psychological aspects could also play a role.

He said the USA would cease all implementation of non-binding elements of the agreement "as of today" and it would begin negotiations either to re-enter the Paris accord or to have a new agreement "on terms that are fair to the United States, its businesses, its workers, its people, its taxpayers".

While OPEC and its partners agreed on May 25 keep output constrained through to early 2018 in a bid to clear a global glut, the Rosneft CEO said non-participants such US shale are using the deal to strengthen their market position.

Still, prices tumbled after the OPEC deal was announced.

"We want to institutionalize cooperation between OPEC and non-OPEC producers", Falih said.

Before the start of trading in NY, the U.S. Energy Information Administration reported gasoline demand in March was down year-over-year for the third month in a row, suggesting some consumer factors may not be eating away at the supply-side strains.

US producers aren't part of the output agreement.

The Organization of the Petroleum Exporting Countries extended a 2016 agreement which calls on most of its members and several non-members to collectively lower their oil output to help support oil prices.

Rising output from the United States and Libya undermines efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russian Federation to tighten an oversupplied market by cutting production by around 1.8 million bpd until the end of the first quarter of 2018.

"News that Libyan production is continuing to grow at levels last seen over three years ago, threatens the prospect that, with rising USA output, the OPEC cuts will become nearly meaningless".

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