Oil prices drop on surprise U.S. stockpile build

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Brent crude futures, the global benchmark for oil prices, were at $77.24 per barrel at 0317 GMT, a notch below their last close.

In similar fashion, the metal for delivery in July contracts was trading higher by Rs 32, or 0.73 per cent to Rs 4,387 per barrel in 272 lots.

West Texas Intermediate fell 1.3% to $64.67 a barrel at 11:45 a.m. ET.

The surge in U.S. production has pulled down U.S. WTI crude into a steep discount versus Brent to more than $11 per barrel, its steepest since 2015.

The Organization of the Petroleum Exporting Countries meets to review its oil output policy on June 22 in Vienna.OPEC, founded in 1960, has a history of collaboration over oil policy despite differences of opinion and even wars between some members over the years.

"OPEC will not bow and obey" to USA pressure to increase oil production, said Hossein Kazempour Ardebili, one of Iran's representatives to the organization. Once again, the nemesis of an oil bull run is higher out in the U.S. and some non-Opec producers like Mexico, Columbia and Azerbaijan.

Bloomberg reports that the US government has asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels a day, reflecting US President Trump dissatisfaction with rising fuel prices at the pump, and decision to reimpose sanctions on Iran crude exports that had previously displaced about 1 million barrels a day.

Trump announced last month that the US would back out of a deal with Iran that sought to curb the country's nuclear ambitions in exchange for sanctions relief.

"The Bloomberg story saying the US has requested more oil from some OPEC nations has initiated the price drop", he said.

Crude oil prices moved lower and continued to form a bear flag pattern.

OPEC is in its second year of an effort to erase a surplus in global crude oil inventories through coordinated production cuts. "We always have conversations with the United States about the stability of the oil market".

Oil prices were stable on Friday, supported by Venezuela's struggles to meet its supply obligations and by ongoing output cuts led by producer cartel OPEC, although surging USA crude output was looming over markets.

"This seems to be an intervention in OPEC's supply policy ..."

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