July 5 (UPI) -- Pessimism over the appetite of some major oil producers to work hard to balance the market with deeper cuts pushed oil prices lower in early Wednesday trading.
Crude oil prices entered July in the midst of one of the stronger surges in five years after reports last week showed a decline in U.S. crude oil production and a move backward for North American rig counts.
U.S. shale oil production has proven more resilient to lower crude oil prices than initially expected, though oil prices touched historic lows in June and suppressed some of the appetite for spending in the American oil market.
Higher U.S. output, coupled with the previous OPEC policy to defend a market share with production growth, brought an end to $100 per barrel oil roughly three years ago. OPEC in January helped establish a $50 per barrel floor under oil when it implemented an effort to balance the market with managed production declines.
A report emailed from London oil broker PVM said OPEC crude oil exports were higher by about half a million barrels per day in June compared with May. That comes as Russian government officials told Bloomberg News there's little appetite for deeper production cuts.
Crude oil prices declined in late May when parties to the agreement decided to extend, rather than intensify, the terms of the arrangement. The price for Brent crude oil was down 0.83 percent at 9:15 EDT to $49.27 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1 percent to $46.60 per barrel.
Broader markets shrugged off the recent missile test from North Korea, which now says U.S. territory is within striking distance. Energy markets, however, could be under pressure because of the lingering row between Qatar and its Persian Gulf allies.
Qatari officials are using a forum hosted by London think tank Chatham House to outline their response to allegations of supporting terrorism. A report last week from RBC Capital Markets said that, given the number of oil and gas players involved in the spat, it's a crisis that energy markets can't ignore.
Danish investor SaxoBank lowered its year-end forecast for Brent crude oil by about 8 percent, saying OPEC is running out of time to push oil beyond the $50 mark. By early 2018, the formal OPEC-led arrangement ends and opens up markets for additional supply-side strains.