Oil slides on increased output from Opec and US

Opec exports hit a record high in July while US production at highest levels in two years

An oil pump is seen operating in the Permian Basin near Midland, Texas. Ernest Scheyder/Reuters

Oil markets dipped on Friday, with US crude remaining below US$50 per barrel, restrained by rising output from the United States as well as producer club OPEC.

US. West Texas Intermediate (WTI) crude futures were at $48.95 per barrel in early morning trading, down 8 cents or 0.2 per cent, from their last close and around 90 cents for the week.

Brent crude futures, the international benchmark for oil prices, were at $51.93 a barrel, down 8 cents or 0.15 per cent, from their last close and around 70 cents for the week.

Traders said prices were being pulled down by rising output, although strong demand prevented bigger drops.

"Developments this week have seen some pessimism return to markets," National Australia Bank said in its August outlook.

"We forecast Brent to trade at around $53 per barrel in Q4 2017," it said.

British bank Barclays said "we expect a downward (price) correction during this quarter," but see Brent at an average of $54 per barrel during the fourth quarter.

Crude oil exports by Opec rose to a record high in July, driven largely by soaring exports from the group's African members, according to a report by Thomson Reuters Oil Research this week.

July's 26.11 million barrels per day (bpd) in exports marked a rise of 370,000 bpd, most of which came from Nigeria, which posted a rise of 260,000 bpd in shipments.

In the US, oil production has hit 9.43 million bpd, the highest since August 2015 and up 12 per cent from its most recent low in June last year.

"Quarterly reporting season has seen a swathe of (US.) shale producers announce aggressive production targets, despite weak prices as they cut costs and become more efficient," ANZ bank said on Friday.

Strong demand is still preventing prices from falling.

US gasoline demand rose to 9.842 million bpd last week, the highest since the US Energy Information Administration began collecting the data in 1991, the federal agency reported this week.

"Gasoline demand is now +0.1 percent (year-on-year). This is reasonably encouraging given it had been flat or negative since late November 2016," US. investment bank Jefferies said.

"Gasoline inventories in the US. fell for the seventh consecutive week ... and are now only 6.3 million barrels above the 5-year average," it said.

*Reuters