Commodities: Crude heads lower as Opec's May output rises 1%

Crude-oil futures were heading south on Tuesday afternoon as Opec confirmed its output rose in May on the back of higher production by Nigeria, Libya and Iraq.

The cartel's output rose 1% to more than 32.14m barrels in May, led largely by increases from three of its 14 members, it said in a monthly report.

Libya and Nigeria were exempt from the cartel's landmark supply cut, but Iraq was not. This came after Qatar said yesterday it would continue with its share of Opec oil production cuts.

The market has been concerned about the sufficiency of Opec's extended production pledge, and whether its member states would adhere to it.

At 15:37 BST, Nymex-priced West Texas Intermediate crude was down 0.72% to $45.75 a barrel. Intercontinental Exchange-traded Brent fell 0.43% to $48.08 a barrel.

The market was also looking to this evening's industry American Petroleum Institute data on US stores last week, and whether these rose or fell.

These would be followed on Wednesday by the government Energy Information Administration numbers.

FXTM research analyst Lukman Otunuga said sentiment towards crude remained overall bearish, despite Saudi Arabia stating it would make export cuts in July in a bid to tighten oil markets.

"While short term bulls may benefit from the speculative boosts in prices caused by Saudi Arabia's statement, this does not change the longer term bearish dynamics," Otunuga said.

"With oversupply concerns a key theme, and there still being a risk of US Shale production sabotaging Opec's efforts to rebalance the oil markets, sentiment towards the commodity remains bearish.

"Technical traders may see the price fail to stabilize above $46 with repeated weakness below this level opening a path towards $45."

Meanwhile, on Comex, gold fell 0.35% to $1264.4 an ounce. Silver fell 1.06% to $16.77 an ounce. Copper was down 0.76% to 259.55 cents a pound.

On LME, three-month industrial metals were mostly down. Zinc fell 1.5%, aluminum lost 0.94% and copper dropped 0.55%. Tin, however, rose 1.33%.