© Joel Angel Juarez / Global Look Press
Brent crude was trading 24 cents lower at $48.08 per barrel, while US West Texas Intermediate (WTI) slipped 38 cents to $45.70.
Both Brent and US crude are about 10 percent below their open on May 25, when OPEC, Russia, and other producers agreed to extend oil output cuts to the first quarter of 2018.
OPEC's monthly report said the cartel's production in May rose by 336,000 barrels per day (bpd) to 32.14 million bpd. The increase was led by a recovery in Nigeria and Libya, which are exempt from supply cuts. OPEC claimed the market was rebalancing at a "slower pace."
Output from Libya grew by more than 178,000 bpd to 730,000 bpd as the country's rival factions came closer to reconciliation.
Nigerian production saw a 174,000 bpd growth to 1.68 million bpd as supplies disrupted by militant attacks on energy infrastructure last year came back online.
"The gradual recovery of the world economy continues and stronger-than-anticipated growth in 1Q17 has lifted the world GDP growth forecast for 2017 to 3.4 percent, up from the 3.1 percent growth seen in 2016," OPEC said.He added that OPEC is giving US producers time to drill new wells, which is undermining the impact of the group's cuts.
"This positive momentum is expected to continue into the second half of the year," it added.
"Crude oil is still struggling to rebound," Olivier Jakob, strategist at Petromatrix, said, as quoted by Reuters.
US oil output is over 10 percent higher since mid-2016 at above 9.3 million bpd.
Comment: It is doubtful that the world economy is truly recovering. What the GDP forecasts miss is the explosion of debt and the ballooning of the main central banks of the world's balance sheets that has taken place in order to stem systemic collapse. This is what has inflated global GDP.
OPEC has repeatedly tried to reach agreements to cut oil production and output in order to have a higher price. Pronouncements from such talks has put a floor under the market as supply outside of OPEC has increased in some countries. It was too long ago that oil, which was manipulated down in price, was used as a weapon in conjunction with sanctions to try to weaken Russia. It has backfired to some extent in that Saudi Arabia has been weakened in terms of their financial resources. This may be one reason Saudi Arabia, in a somewhat desperate and reckless fashion, along with other Middle East countries has tried to isolate Qatar.