Oil prices dipped on Thursday, weighed down by plentiful supplies despite an ongoing effort led by OPEC to cut production in order to tighten the market and prop up prices. Brent crude futures were down 21 cents, or 0.4 percent, from their last close at $52 per barrel at 0148 GMT. US West Texas Intermediate (WTI) crude futures were at $48.88, down 19 cents, or 0.4 percent.
The downward correction partly reversed gains from the previous session when prices rose on the back of a drawdown in U.S. crude inventories and a slight dip in American production.
The U.S. Energy Information Administration said on Wednesday that crude inventories fell 1.8 million barrels for the week to May 12, to 520.8 million barrels.
However, the drawdown was smaller than expected, and many traders say there is still more oil in the system than the market can absorb.
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“The fall in stockpiles undershot the expectation of a 2.36 million draw,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Overall oil supplies remain ample, with large amounts of crude from the United States and other producers being shipped to the big consumer regions in northern Asia, undermining OPEC-led efforts to tighten the market.
The Organization of the Petroleum Exporting Countries (OPEC) and some other producers including Russia have pledged to cut production by almost 1.8 million barrels per day (bpd) during the first half of 2016, a deal likely to be extended until the end of March 2018.
Other producers have been quick to fill any potential supply gap.
Shipping data in Thomson Reuters Eikon shows that U.S. oil exports to Asia have soared from just a handful of tankers per quarter throughout 2015 and 2016, to 10 tankers in the first quarter of this year, a figure that is expected to rise in the second quarter.
North Sea oil shipments to Asia have also been at record highs this year, with almost 19 tankers registered to have been shipped in Q1, and a similar amount expected to go to Asia in the second quarter.