Oil falls as evidence points to rising global supply
Prices dropped even as OPEC signaled it may widen its production caps to include Nigeria and Libya, whose output has recovered in recent months after being curtailed by years of unrest.
Brent crude futures fell 51 cents on the day to $46.20 per barrel by 1120 GMT, while U.S. crude futures were last 49 cents lower on the day at $43.74 a barrel.
“The market is in trouble and looks very vulnerable to lower numbers,” PVM brokerage said in a note.
The Organization of the Petroleum Exporting Countries has agreed with some non-OPEC members to curtail production until March 2018 but the move has failed to eliminate a global glut of crude.
Several key OPEC ministers will meet non-OPEC Russia on July 24 in St Petersburg, Russia, to discuss the situation in oil markets.
Kuwait said on Sunday that Nigeria and Libya had been invited to the meeting and their production could be capped earlier than November, when OPEC is scheduled to hold formal talks, according to Bloomberg.
Libya said on Monday it was ready for dialogue but added that its political, economic and humanitarian situation should be taken into account in talks on caps.
Brent prices are 17 percent below their 2017 opening despite strong compliance by OPEC with the production-cutting accord.
ANZ bank said the market “continued to focus on the increasing (U.S.) drilling activity and higher production”.
U.S. energy firms added seven oil drilling rigs last week, marking a 24th week of increases out of the last 25 and bringing the count to 763, the most since April 2015, energy services company Baker Hughes said.
US oil production has risen more than 10 percent since mid-2016.
“This is the response of prices to news of increasing oil production in the U.S.,” Commerzbank said in a note. “The U.S. Department of Energy reported a marked rise in production that virtually reversed the previous week’s decline.”
There are some indicators the oil market might have bottomed as money managers have raised their long positions since the start of July after reducing them to a nine-month low by late June. –Reuters