Oil prices fell on Friday after a consultancy report forecast a rise in OPEC production for July despite the group's pledge to curb output, reigniting concerns the market will stay awash with crude. Petro-Logistics, which tracks OPEC supply forecasts, said OPEC crude production would rise by 145,000 barrels per day (bpd) this month, taking the group's combined output above 33 million bpd. Higher supply from Saudi Arabia, the United Arab Emirates (UAE) and Nigeria would drive this month's gains, it said.

Oil is struggling to regain the highs of January after a sell-off in global equities seeped into crude markets earlier this month. Surging U.S. production continues to challenge efforts by the Organization of Petroleum Exporting Countries and its friends to alleviate a global oversupply, with forecasts pointing to record output from the Permian shale basin. “Prices are vulnerable to the downside over the coming months,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “Though the market likes OPEC and its allies’ show of unity, we still need to see how U.S. shale companies will react on higher prices and eventually offset all the efforts of OPEC and others to reduce inventories.” The increase in U.S. production is not “a blip,” Brouillette said. “We are optimistic about 2019 and 2020 too.” Click Read More below for additional information.