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Oil Dips on Glut Concerns, Falling US lent Support

Oil prices dipped on Wednesday, with Brent crude futures around $50 per barrel, as fuel markets remained oversupplied, although tension in the Middle East and falling US inventories lent some support.

Brent crude futures were at $50.08 per barrel at 0504 GMT, down 4 cents from their last close. Brent is 7 percent below its open on May 25, when OPEC said they, along with producers outside of the group such as Russia, would extend their oil output cuts through to the first quarter of 2018.

US West Texas Intermediate (WTI) crude futures were at $48.14 per barrel, down 5 cents from the previous close, and 6 percent below their May 25 open. Traders said an ongoing fuel glut was keeping prices under pressure despite a pledge by Organization of the Petroleum Exporting Countries (OPEC) and other producers to cut almost 1.8 million barrels per day (bpd) of output.

A campaign by leading Arab nations, including Saudi Arabia, Egypt and the United Arab Emirates, to isolate Qatar is disrupting trade, including oil.

In the United States, crude inventories fell by 8.7 million barrels in the week to May 26, data from the American Petroleum Institute showed late on Tuesday. Official inventory data from the EIA will be published later on Wednesday.

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