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Oil Prices Hold Near Recent Lows Amid Worries Over Higher Supplies

Published 04/06/2018, 09:06
Updated 04/06/2018, 09:12
© Reuters.  Oil Prices Hold Near Recent Lows
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Investing.com - Oil prices got off to a lackluster start on Monday, as rising U.S. crude production and expectations that OPEC members will raise supplies remained in focus.

U.S. West Texas Intermediate WTI crude fell as low as $65.57 per barrel, touching their lowest level in almost two months. It last traded at $65.84 at 4:05AM ET (0805GMT), little changed on the day.

Last week, the U.S. benchmark lost roughly 3%, adding to a near 5% decline from a week before.

Underscoring worries over rising output, U.S. energy companies added two oil rigs in the week to June 1, bringing the total count to 861, the highest level since March 2015, General Electric (NYSE:GE)'s Baker Hughes energy services firm said in its closely followed report on Friday.

U.S. crude production has been rising to record levels since late last year. In March it jumped 215,000 barrels per day (bpd) to 10.47 million bpd, a new monthly record, the Energy Information Administration said last week.

Only Russia currently produces more, at around 11 million bpd.

Elsewhere, Brent crude futures were down 15 cents at $76.64 a barrel, after losing 1% on Friday.

Prices in recent sessions have declined on concerns that the Organization of the Petroleum Exporting Countries and non-OPEC members led by Russia would decide to lift output by up to 1 million barrels a day as early as this month in reaction to lost supplies out of Venezuela and Iran.

OPEC is scheduled to hold its next meeting in Vienna on June 22.

Meanwhile, Brent's premium over WTI futures remained near three-year highs above $10 a barrel. The premium has doubled in less than a month, as a lack of pipeline capacity in the United States has trapped a lot of output inland.

Fresh data on U.S. commercial crude inventories will be the main focus for oil markets in the week ahead as traders seek to gauge how fast domestic output levels will continue to rise now that U.S. oil production has come close to matching that of top producer Russia.

Comments from global oil producers for additional signals on whether they plan to extend their current production-cut agreement into next year will also remain on the forefront.

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