Brent oil futures under selling pressures as OPEC, Qatar raise output

Oil futures came under selling pressure following news that the Organisation of Petroleum Exporting Countries had increased its production and amid simmering geopolitical tensions around Qatar.

As of 1118 BST front month Brent crude futures were falling 1.39% to $48.93 a barrel on the ICE.

OPEC increased its oil exports for a second month in June, despite a pledge from its members to rein in their production until March 2018 in order to keep prices higher.

According to Thomson Reuters Oil Research, the cartel exported 25.92m barrels per day last month.

That was 450,000 b/d above May's level and 1.9m b/d more than a year earlier.

Acting as a backdrop, on Wednesday morning Moody's downgraded its outlook on the long-term sovereign debt rating of Qatar from 'stable' to 'negative', warning of the impact the ongoing diplomatic spat might have on the country's economy.

In parallel, Bloomberg reported Qatar Petroleum was taking "legal actions" after Abu Dhabi National Oil Co. halted shipments of condensate from Qatar after declaring 'force majeure'.

The day before, the Qatari company announced it would work to boost its production of liquid natural gas from its North Field by 20% or 4bn cubic feet of gas per day, which was equivalent to a 1.0m barrel of oil equivalent per day increase from then current levels.

Analysts were also waiting for the release of the US Department of Energy's weekly oil inventory data on 6 July.

A poll from Reuters revealed they were expecting a 2.8m barrel drawdown in commercial US oil stockpiles during the week ending on 30 June.