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By Bloomberg

Oil headed for the biggest weekly drop since March amid speculation OPEC will maintain its output target at a meeting on Friday, leaving the market oversupplied.

Futures were little changed in London, poised for a 5.1 percent decline through June 5. The Organization of Petroleum Exporting Countries will continue its battle to retain market share, according to Maria van der Hoeven, the executive director of the International Energy Agency. The 12-member group is forecast to keep its daily production target of 30 million barrels unchanged at the meeting in Vienna.

Brent’s recovery from a six-year low is stalling on signs a global glut will persist as OPEC continues to pump above its target. Saudi Arabia has defended its strategy of favoring market share over supporting prices after leading a group decision in November not to reduce the quota.

“The consensus appears that no action is likely from OPEC,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “The biggest risk to oil is to the downside from current levels because at this stage the market is still well oversupplied.”

Brent for July settlement was at $62.27 a barrel on the London-based ICE Futures Europe exchange, up 24 cents, at 12:30 p.m. Singapore time. The contract decreased $1.77 to $62.03 a barrel on Thursday. The European benchmark crude traded at a premium of $4.15 to West Texas Intermediate.

OPEC Output

WTI for July delivery was at $58.13 a barrel in electronic trading on the New York Mercantile Exchange, up 13 cents, after falling $1.64 to $58 on Thursday. It’s 3.6 percent lower this week, set to snap a record 11 weeks of gains. The volume of all futures traded was about 63 percent below the 100-day average.

OPEC, which supplies about 40 percent of the world’s crude, pumped 31.58 million barrels a day in May, exceeding its quota of 30 million barrels for a 12th consecutive month, according to data compiled by Bloomberg. The decision in November to keep output unchanged was a good one, Kuwait’s Oil Minister Ali Al- Omair said in an interview Thursday.

Maintaining the production target has helped to reduce the glut, United Arab Emirates Energy Minister Suhail Mohammed Al Mazrouei said. Iran’s Oil Minister Bijan Namdar Zanganeh predicted “nothing significant” will happen at the meeting.

Iran, which wants OPEC to make room for increased supply if global sanctions on the nation are eased, said the market has “serious oversupply.” Venezuela’s Energy Minister Asdrubal Chavez this week predicted that surplus is as much as 2.5 million barrels a day.

U.S. Supply

In the U.S., the best parts of the shale industry can generate returns of 10 percent with prices as low as $40 a barrel, ConocoPhillips Chief Executive Officer Ryan Lance told reporters in Vienna. Break-even costs have dropped 15 percent to 30 percent in recent months while the amount that drillers are able to suck out of the ground from each well has increased up to 30 percent, Lance said.

Crude production in the U.S., the world’s biggest oil consumer, accelerated by 20,000 barrels a day to 9.59 million a day through May 29, the Energy Information Administration reported on Wednesday. That’s the highest level since January 1983, according to weekly data from the Energy Department’s statistical arm.