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Oil prices fell by one percent early on Wednesday after data showed a build in US crude stocks and OPEC reported a rise in its production despite its pledge to cut back.

The EIA said USA crude inventories fell by 1.7 million barrels in the week ending June 9, against a market expectation of a 2.7 million drawdown and compared to yesterday's 2.7 million barrel increase reported by the American Petroleum Institute.

Oil prices have been under pressure in recent weeks as concern over rising US shale output offset production cuts by OPEC and non-OPEC members.

Gasoline stocks rose 2.1 million barrels, or 0.9 percent, to 242.4 million barrels, for the week ending June 9, Energy Information Administration (EIA) data showed.

As of mid-morning Wednesday, U.S. Brent crude was down $1.53 a barrel, or 3.1%, at $47.19.

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However, prices are still down by almost 13 percent since May 25, when the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other oil producers agreed to extend production cuts.

Both contracts hit their lowest since May 5, driving them into technically oversold territory.

"Our first outlook for 2018 makes sobering reading for those producers looking to restrain supply", the IEA said in its monthly oil market report.

Rising U.S. oil output, particularly from shale drillers, is contributing to the ineffectiveness of the OPEC-led cuts.

Under the deal to support the market, OPEC is curbing output by about 1.2 million bbl/d and Russian Federation and other non-OPEC producers are cutting by half as much.

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Oil prices dropped to six-week lows on Thursday, under pressure from high global inventories and doubts about OPEC's ability to implement agreed production cuts.

With supplies plentiful, strong demand is needed to support the market, but there are signs of a slowdown.

"Libya and Nigeria have brought more oil online and that's really hindering" OPEC's efforts, said Tariq Zahir, crude trader and managing member at Tyche Capital Advisors in NY.

"The outlook for oil hinges on the effectiveness of the OPEC cuts relative to the supply increases from United States shale", said an analyst at Australia's Rivkin Securities, William O'Loughlin. The four-week average for gas consumption is 1.2 percent below the year-ago level.

OPEC on June 13 said a long-awaited rebalancing of the oil market was under way at a "slower pace" and reported that its own output in May jumped due to gains in nations exempt from a pact to reduce supply.

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