LONDON (Reuters) - Oil prices dipped on Friday as the market refocused on a persistent fuel supply overhang that is not expected to abate unless OPEC and other producers cut their output significantly.
International Brent crude futures traded at $45.70 per barrel at 0945 GMT, down 14 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures were trading 29 cents lower at $44.37 per barrel, weighed down by weakening U.S. demand.
"This week, both U.S. gasoline and diesel demand decelerated on a four-week rolling average basis to minus 2.1 percent year-on-year and plus 0.9 percent, respectively," U.S. investment bank Jefferies said on Friday.
Traders said a crude and refined product glut that has dogged markets for over two years was dragging on prices.
The supply overhang could run into a third year in 2017 without an output cut from the Organization of the Petroleum Exporting Countries, while escalating production from other exporters could lead to relentless supply growth, the International Energy Agency (IEA) said on Thursday.
"Oil markets are increasingly reflecting growing consensus that the persistent oversupply seen throughout 2016 will carry on into 2017," analysts at JBC Energy wrote.
"We would actually go a step further, as while 2016 has seen a significant improvement from 2015 with easing oversupplies, 2017 will be worse again barring massive outages or OPEC action."
In its monthly oil market report, the IEA said global supply rose by 800,000 barrels per day (bpd) in October to 97.8 million bpd, led by record OPEC output and rising production from non-OPEC members such as Russia, Brazil, Canada and Kazakhstan.
Nigeria is working out new oil and gas policies to attract more private investors and boost crude production by 500,000 bpd by 2020, state firm NNPC said on Thursday.
The IEA kept its demand growth forecast for 2016 at 1.2 million bpd and expects consumption to increase at the same pace next year, having slowed from a five-year peak of 1.8 million bpd in 2015.
Beyond oversupply, a surging dollar following the initial shock of Donald Trump's U.S. presidential election win also put pressure on prices, traders said. The dollar was on course on Friday for its best week in a year.
Because oil and refined products are traded in dollars, their import costs rise for countries using other currencies, potentially crimping demand.
(Reporting by Sabina Zawadzki; Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson)