– This is the script of CNBC's news report for China's CCTV on June 21, Wednesday.
Welcome to CNBC Business Daily, I'm Qian Chen.
Oil prices fell about 3 percent to seven-month lows on Tuesday after increases in supply by several key producers overshadowed high compliance by OPEC and non-OPEC oil producers with a deal to cut global output.
The closing level of WTI on Tuesday reached the lowest since Sept. 16, which is more than 20 percent below WTI's 52-week closing high in February, putting the commodity in bear market territory.
Both Brent and WTI, the two oil benchmarks are down about 15 percent since late May, when OPEC, Russia and other producers extended their limits on production until the end of March 2018.
OPEC supplies, however, jumped in May as output recovered in Libya and Nigeria, both exempt from the production reduction agreement.
Libya's oil production rose more than 50-thousand bpd to 885-thousand bpd, according to Reuters.
Meanwhile, Nigerian oil supply is also rising. Loading programs show that exports of Nigeria's Bonny Light crude are set to reach 226-thousand bpd in August, up from 164,000 bpd in July.
Hedge fund managers have become very bearish about the outlook for oil prices as production from countries outside OPEC grows and threatens to undermine the effectiveness of OPECs output controls. Energy stocks were sold off across the bourse on the lower oil prices.
Overnight, S&P engergy index tumbled by 1.25%.
Energy giants like Chevron, ConocoPhillips, Exxon Mobil, Halliburton all closed lower.
Now, looking forward, data is the key, according to some analysts.
Ahead of weekly U.S. inventory reports, U.S. crude oil stocks were forecast to have fallen for the second straight week, while gasoline supplies were seen unchanged after last week's data showed an unexpected build that weighed down the market.
However, some still hold a relatively bullish view toward a higher oil price by the end of this year.
[BILL SMITH, Blaine Capital President and Chief Investment Officer] "I expect oil to be a great deal higher than where it is at the year end. When you think about OPEC, OPEC is Saudi Arabia. Saudi Arabia needs the oil to go higher. They are doing an IPO fo Aramco, they need about $88 to just break-even witht their social program in the Kingdom alone, so the Saudis need oil higher, OPEC is Saudi Arabia so we expect a lot of these cuts start to kick in soon."
CNBC's Qian Chen, reporting from Singapore.