The market wasn't caught by surprise by the IEA data, as on Tuesday, the American Petroleum Institute reported that USA crude inventories rose 2.8 million barrels last week, while gasoline supplies increased by 1.8 million barrels.
Analysts estimated, on average, that crude stocks fell 2.7 million barrels in the week ended June 9. Inventories were 292 million barrels higher than the average over the past five years, said the agency, which advises governments on energy trends. "I would think that at some point the market is going to be pricing in even greater risks that the Fed might be moving too quickly", said Mark Cabana, a rates strategist at Bank of America Merrill Lynch in NY.
Data on Wednesday showed US consumer prices unexpectedly fell in May and retail sales recorded their biggest drop in 16 months. New supplies from OPEC's competitors will be more than enough to meet growth in demand next year, the IEA said in a report Wednesday.
IEA expects total non-OPEC production to increase by.7 mb/d in 2017, and to grow by 1.5 million b/d in 2018, slightly more than the forecast increase in global demand.
Benchmark Brent crude was 28 cents higher at US$48.57 a barrel as of 1.53pm EDT (1753 GMT), while USA light crude was up 21 cents to US$46.29 a barrel.
Qatar crisis will have a very little impact on global oil prices as the country is not a major producer of Oil. "OPEC will therefore have to cut production further next year to ensure that the oil market is not oversupplied".
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Oil inventories in developed nations remain higher than before OPEC started cutting production.
The group also cut its forecast for growth in the United States, where shale producers have gained impetus from the higher prices brought about by the cut.
"They're making a lot of headlines about reducing supplies but that's also right in their seasonal pattern of lowering exports in July, August because of domestic needs", he said.
Oil is extending its slump below $50 a barrel amid speculation increasing USA supplies will counter production curbs by the Organization of Petroleum Exporting Countries and allies including non-OPEC member Russian Federation.
Parties to an agreement led by the Organization of Petroleum Exporting Countries to balance the market through managed production declines made a decision to extend the arrangement by three months into early 2018.
The bulk of the upward adjustment in non-OPEC oil supply since December "has come from the US", OPEC said.