Oil prices fell to seven-month lows today after news of increases in supply by several key producers, a trend that has undermined attempts by OPEC and others to support the market through reduced output.
Benchmark Brent dropped $1.29 to a low of $45.62 a barrel, its weakest since November 15.
This was two weeks before OPEC and other producers agreed to cut output by 1.8 million barrels per day (bpd) for six months from January.
The US crude futures contract for July fell $1.27 to $42.93, its lowest since November 14, before recovering to around $43.10.
Both benchmarks are down more than 15% since late May, when the Organisation of the Petroleum Exporting Countries, Russia and other producers extended limits on output until the end of March 2018.
OPEC supplies jumped in May as output recovered in Libya and Nigeria, both exempt from the production reduction agreement.
Libya's oil production rose more than 50,000 bpd to 885,000 bpd after the state oil company settled a dispute with Germany's Wintershall, a Libyan source told Reuters.
Nigerian oil supply is also rising. Exports of Nigeria's Bonny Light crude are set to reach 226,000 bpd in August, up from 164,000 bpd in July, loading programmes show.
US oil production has been rising quickly this year, feeding the global glut. Data on Friday showed a record 22nd consecutive week of increases in US oil drilling rigs.
"Recent data points are not encouraging," Morgan Stanley analysts said in a note to clients.
But Saudi Energy Minister Khalid al-Falih said the oil market is heading in the right direction and just needs time to rebalance, the London-based newspaper Asharq al-Awsat reported this week.
