Oil prices headed lower on Monday as a continuous increase in U.S. production caused concern that major oil producers would be unable to achieve a dent in the global supply glut despite their agreement to cut output.
On the New York Mercantile Exchange, U.S. crude futures for May delivery fell 0.26% to $53.04 by 8:37AM ET (12:37GMT), while Brent oil for June delivery on London’s Intercontinental Exchange lost 0.16% to $55.80.
Late Thursday (prior to the Easter holiday period), oilfield services firm Barker Hughes reported its weekly U.S. rig count rose by 11 to 683. That was the thirteenth straight weekly increase to its highest level in nearly two years.
Investors have been concerned that increasing U.S. output would derail major oil producers’ attempts to cut production.
Saudi Arabian energy minister Khalid al-Falih once again insisted on Monday that there was a consensus within the Organization of Petroleum Exporting Counties (OPEC) to stabilize the oil market and that producers would do whatever was necessary to achieve that goal.
In November of last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day during the first half of 2017.
Most oil producers support an extension of output cuts by OPEC and non-OPEC countries, and Iran would also back such a move, Iranian Oil Minister Bijan Zanganeh was quoted as saying last week.
However, al-Falih also said Monday that it was too early to discuss whether extending the deal to cut production beyond June was necessary.
OPEC energy ministers have suggested that a decision will be reached at their official meeting in Vienna on May 25.
