Oil slides amid worries over ample U.S. supplies
Oil prices slumped in North American trading on Thursday, amid concern that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.
The U.S. West Texas Intermediate crude June contract dropped 61 cents, or around 1.3%, to $48.45 a barrel by 8:45AM ET (12:45GMT).
The U.S. benchmark gained 41 cents on Wednesday after data showed U.S. crude stockpiles fell for the sixth week in a row.
Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London declined 62 cents to $51.59 a barrel, after rising 56 cents a day earlier.
The U.S. Energy Information Administration said Wednesday that crude oil inventories fell by 1.8 million barrels in the week ended May 12, the sixth weekly decline in a row.
However, the drawdown came in below expectations for a drop of 2.3 million barrels, underlining the view that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.
Oil rallied at the start of the week on news that Saudi Arabia and Russia agreed to extend oil output cuts for a further nine months until March 2018.
However, the 12 remaining OPEC members and other producers participating in the cuts have to agree to the extension during a meeting on May 25.
In November last year, OPEC and other major global producers, including Russia, agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.