Oil falls as Saudi output rises to compensate for disruptions
SINGAPORE (Reuters) - Oil prices fell by more than one percent on Monday as investors eyed rising supplies in Saudi Arabia, while US President Donald Trump kept up the pressure on the world’s top producer to make up for disruptions elsewhere.
Brent crude oil futures LCOc1 were at $78.35 per barrel at 0231 GMT, down 88 cents, or 1.1 percent, from their last close.
US West Texas Intermediate crude futures CLc1 were down 89 cents, or 1.2 percent, at $73.26 a barrel, after rising more than 8 percent last week.
Trump said in a tweet on Saturday that Saudi Arabia’s King Salman bin Abdulaziz Al Saud had agreed to produce more oil. The White House later walked back the president’s comments, saying the king said his country can raise oil production if needed.
Saudi Arabia’s output is up 700,000 bpd from May, a Reuters survey found on Friday, and close to its 10.72 million bpd record from November 2016, more than making up for disruptions elsewhere within the Organization of the Petroleum Exporting Countries (OPEC).
A source last week told Reuters Saudi Arabia produced 10.8 million bpd in June and it aimed to pump 11 million bpd in July.
“If his (Trump’s) entreaty to the Saudis to prime the pumps and get them producing again proves correct, then it will go a long way to redress the supply disruptions,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Voluntary supply cuts by OPEC and some non-OPEC suppliers like Russia have tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new US sanctions against major exporter Iran have sparked concerns of supply shortfalls.