“The U.S. market perhaps doesn’t believe in the oil market balance that OPEC would have us believe,” said Hans van Cleef, senior energy economist with ABN AMRO.
OPEC members Saudi Arabia and Kuwait signaled that an effort by the Organization of the Petroleum Exporting Countries and other producers, including Russia, to cut oil output was likely to be extended beyond June.
But bloated inventories weighed. Despite a drop in U.S. crude stocks last week, an unexpected 1.5-million-barrel build in gasoline stocks drove prices more than 3.5 percent lower on Wednesday.
U.S. crude oil production rose to 9.25 million barrels per day, official data showed, up almost 10 percent since mid-2016.
Patrick Pouyanne, the chief executive of French oil and gas giant Total, said on Thursday prices could fall again by the end of the year due to a rapid increase in U.S. shale production.
“The rebalancing in U.S. crude stocks may have got under way, but concerns about further gasoline builds are rife even as the U.S. summer driving season shifts up a gear,” said Stephen Brennock, an analyst with PVM Oil Associates.
“With questions hanging over U.S. gasoline demand, any further product builds will act as a brake on the oil price recovery,” he said.
Global fuel stocks are well above the five-year average, and Saudi Energy Minister Khalid al-Falih was quoted on Thursday as saying inventories remained elevated in part because traders were selling supplies out of tanker storage.
In China, signs emerged that refiners were using record crude imports to produce more fuel such as gasoline and diesel than the country can absorb.
China’s March gasoline output rose 2.5 percent year-on-year to 11.24 million tonnes, the highest level since at least April 2014, China’s National Bureau of Statistics said, adding fuel into an Asian market that is already well supplied.