Oil dips in Asia, as fears over strong production and poor demand weigh

On Thursday crude oil prices dropped in Asia as markets were still worrisome about the strong production outlooks as there were few signs of a surge in demand.

WTI crude for June delivery lost 0.58% to trade at $60.15 a barrel.

Brent crude for July delivery ticked down 0.16 or 0.23% to $67.22 a barrel on Wednesday.

A day earlier, crude futures dipped saw a decline as the International Energy Agency suggested a prolonged battle between OPEC and non-OPEC members for global market share has just begun.

The agency's monthly data provided signs that a glut of global supply has remained unchanged, as a slowdown in U.S. shale production has failed to offset increased OPEC output, as well as a surge in output from a number of unexpected emerging markets.

In its monthly report released on Wednesday, the IEA said that global oil supply stood at 95.7 million barrels per day, remaining unchanged from the previous month. With the surge in production from Iraq and Iran, OPEC increased output by 160,000 bpd for the month from an upward revised 960,000 bpd gain in March. OPEC's supply level for April exceeded 31.2 million bpd, its highest level since September, 2012.

Output in Brazil soared by 17% in the first quarter of the year, while production in Russia surged for the month by 185,000 barrels per day on a year-over-year basis. The IEA also said China, Vietnam and Malaysia posted steady gains.

In the U.S., the Energy Information Administration (EIA) said in its weekly inventory report that crude stockpiles last week fell by 2.2 million barrels to 484.8 million, amid strong refinery demand.

The report comes a week after inventories declined by nearly 4.0 million barrels for the week ending May 1, marking the first time crude buildups moved lower on the year. Crude storage peaked at a record 490.9 million barrels in April - the highest in at least 80 years, exacerbating concerns that the U.S. could reach full storage capacity before the start of the summer.

The EIA expects U.S. shale production to decline even further in the coming months, as it predicts a drop of more than 54,000 in May followed by a reduction of more than 86,000 in June, according to its Drilling Productivity Report.

As the EIA predicted, a modest increase of 7,000 bpd at the Permian basin in West Texas will not be enough to offset significant declines at the Eagle Ford formation in South Texas and the Niobrara shale formation in the Midwest.

Energy challenges could be at the top of the agenda at a U.S. summit with Persian Gulf nations at Camp David later this week. At the summit, Crown Prince Mohammed bin Nayef is expected to represent Saudi Arabia, replacing Saudi King Salman, who declined an invitation from U.S. president Barack Obama.