Oil prices hit seven-month lows on global oversupply

On Tuesday, the prices of oil dropped to seven-months low, after news of increase in supply came by several key producers.

Worldwide benchmark Brent crude fell 3.1 percent to as low as $45.45 per barrel - its lowest level since November 15.

US West Texas Intermediate crude futures were down 1 cent at $44.19 a barrel.

Despite the global cuts in crude oil supply to the worldwide market by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members, crude oil prices yesterday dropped to seven-week low as production increases from key producers undermined the efforts of the cartel to reduce the glut in the oil market.

Libya's oil production averaged 390,000 bpd in 2016, the report shows.

US crude-oil prices on Tuesday retreated in to bear-market territory, defined as a drop of at least 20% from a recent peak, as the industry continues to be dogged by oversupply concerns.

EIA expects US crude oil production to increase through 2018, averaging 9.3 million b/d in 2017 and 10.0 million b/d in 2018.

World oil prices are changing differently on June 20 amid the concerns over implementation of the oil output cut deal reached by OPEC and some non-OPEC countries.

Supply growth in 2018 could contribute to downward pressure in oil prices as early as late 2017. If the rig count holds at current levels, the bank added, USA oil production would increase by 770,000 bpd between the fourth quarter of last year and the same quarter this year in the Permian, Eagle Ford, Bakken and Niobrara shale oil fields. The opposite happened, and prices fell. Growth in total non-OPEC production in 2018 is forecast to be 1.5 million barrels per day (b/d), compared with expected growth of 660,000 b/d this year.

"If we get bearish USA oil statistics this week, we could see a test of $45 on Brent", Varga said.

Analysts also said a steady rise in USA crude production has also fed the global crude glut. US drillers targeting crude added rigs for a 22nd straight week, the longest uninterrupted stretch of growth in three decades, according to data from Baker Hughes Inc. on Friday.

The output from Libya also put down OPEC efforts further after it reported that it plans to extend production by 1 million barrels per day by the end of July. That view was undermined in recent weeks by data showing that combined stockpiles of crude and fuels in the US, still the biggest consumer, swelled by 22 million barrels.