Oil prices slide over worries Middle East developments

Oil prices fell for a third day on Tuesday, hit by concerns that a political rift between Qatar and several Arab states would undermine an OPEC-led push to tighten the market.
Persistent gains in US production also dragged on benchmark crude prices, traders said.
Brent crude LCOc1 was trading at $49.27 per barrel at 0424 GMT, down 20 cents, or 0.4 percent from its last close. That is down 9 percent from the open of futures trading on May 25, when an OPEC-led policy to cut oil output was extended into the first quarter of 2018.
U.S. West Texas Intermediate (WTI) crude CLc1 had dropped 18 cents, or 0.2 percent, to $47.21 per barrel. That is down about eight per cent from the May 25 open.
Steps taken include preventing ships coming from or going to the small nation to dock at Fujairah, in the UAE, used by Qatari oil and liquefied natural gas (LNG) tankers to take on new shipping fuel.
Analysts said that the current dispute goes much deeper than a similar rift in 2014.
With oil production of about 620,000 barrels per day (bpd), Qatar’s crude output ranks as one of the smallest among the Organization of the Petroleum Exporting Countries (OPEC), but tension within the cartel could weaken an agreement to hold back production in order to prop up prices.
Greg McKenna, chief market strategist at futures brokerage AxiTrader, said that the boycott of Qatar meant there was “a real chance” that OPEC solidarity surrounding its production cuts may fracture.
Although Qatar is a small oil producer, other OPEC states could see such an action as a reason to stop restraining their own output, traders said.
Worries over the outlook for OPEC’s drive to rein in production come amid bulging supplies from elsewhere, especially the United States.
U.S. crude production has jumped over 10 percent since mid-2016 to 9.34 million bpd C-OUT-T-EIA, levels close to top producers Russia and Saudi Arabia.