* U.S. crude inventories fall, but reduction smaller than
* Despite OPEC-led production cuts, oil supplies remain
* Record volumes of U.S., North Sea oil being shipped to
By Henning Gloystein
SINGAPORE, May 18 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.
U.S. 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.
"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
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
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.
(Reporting by Henning Gloystein; Editing by Joseph Radford and