Relief in the oil patch seems far-fetched. As if brimming U.S. supplies were not enough, oil prices received another blow from Russia. As per an article published on Bloomberg, Russia will likely disapprove any talks related to deepen the oil output cuts in the meeting slated on July 24 beyond the current limit effected by OPEC and some other oil producers (read: How to Trade Oil with ETFs After Surging U.S. Output).

In the meeting, OPEC and other nonmembers will discuss on how to reduce global supply glut, as oil prices are still subdued despite the extension of the output cut deal in May thanks to huge U.S. shale output. Of late, several analysts including Goldman Sachs Group Inc. have stressed on the need to cut output further to stabilize the oil market, if we go by the Bloomberg article.

Rising exports by the OPEC have also made matters worse. OPEC exported 25.92 million barrels per day (bpd) in June, 450,000 bpd more than in May and 1.9 million bpd more than a year earlier, as per Reuters.

Hurt by these news, oil prices registered an acute drop on July 5 after their longest rally in more than five years. WTI crude ETF United States Oil  (USO – Free Report) lost about 3.9% while Brent crude ETF United States Brent Oil (BNO – Free Report) dropped about 3.5%.

How Has Oil Price Been So Far This Year?

Reduction of the output quota started this January. In May, the output cut deal was extended to the first quarter of 2018. But in mid June, the liquid commodity slipped into the bearish territory hurt by surging U.S. supplies and lower Chinese refinery activity (read: Oil in Bear Market: 4 Country ETFs to Shun).

Against these doldrums, news of diminished U.S. output led to an oil rally in late June. Including sharp losses recorded on July 5, USO and BNO are up about 3.4% and 3.1% in the last 10 days. Overall, USO and BNO are down about 21.1 % and 19.2% so far this year (as of July 5, 2017).