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Unless OPEC extends the curbs beyond June or makes bigger cuts, traders say oil prices are at risk of falling further.
Oil prices dipped on March 23, struggling to recover from four-month lows because of investor concerns that OPEC-led supply cuts were not yet reducing record U.S. crude inventories.
The total amount of crude in U.S. storage rose to a new high led by gains in the East Coast, Rocky Mountains and Midwest, where new regional records were set, according to EIA data.
Oil prices slipped to almost four-month lows March 22 after data showed U.S. crude inventories rising faster than expected, piling pressure on OPEC to extend output cuts beyond June.
New production projects and a fresh shale boom could boost oil output by a million barrels per year and result in an oversupply in the next couple of years, according to Goldman Sachs.
That decline also came ahead of the release of weekly U.S. crude inventory data later March 21 and on March 22 that is expected to show a crude stock build of 2.6 million barrels.
OPEC oil producers increasingly favor extending beyond June a pact on reducing crude supply to balance the market, sources within the group said, although Russia and other non-members need to remain part of the initiative.
Benchmark Brent crude futures were down 55 cents at $51.21/bbl at 7:19 a.m. CT (12:19 GMT). U.S. West Texas Intermediate crude futures were trading 73 cents lower at $48.05/bbl.
Eleven non-OPEC oil producers that joined a global deal to reduce output to boost prices delivered 64% of promised cuts in February, an industry source said, still lagging the higher levels of OPEC itself.
Midland County, Texas, led the nation with the largest decrease in employment among large cities, while Irion County weekly pay was second-highest among small Texas counties.
Oil prices rose March 17, helped by a weaker dollar, as investors weighed the impact of OPEC production cuts against rising U.S. shale oil output and persistently high inventories.
A March loading program had pointed to southern exports from Iraq—OPEC's second-largest producer—falling to 3 MMbbl/d, but instead have averaged 3.25 MMbbl/d so far in March.