Crude Oil Prices Settle 4% Lower as Traders Cut Bets on Global Supply Shortage

Investing.com – A wave of selling hit crude oil prices Friday on signs of increasing U.S. oil expansion and reports OPEC and its allies could lift output to counter a supply shortage from Iran and Venezuela.

On the New York Mercantile Exchange for July delivery fell 4% to settle at $67.88 a barrel, while on London’s Intercontinental Exchange, fell 2.98% to trade at $76.44 a barrel.

The number of oil rigs operating in the US jumped by , its highest level since March 13, 2015, according to data from energy services firm Baker Hughes, pointing to signs of an expansion in U.S. output.

That comes as the Energy Information Administration said Wednesday U.S. oil output rose to 10.7 million barrels a day last week.

“The data is likely seen to be as a slight negative for WTI oil prices as the oil rig count had its biggest one week increase in three and a half months,” National Alliance said.

Oil prices started the session on the back foot as Reuters said major oil producers could raise output by as much as 1 million barrels, eroding the risk-premium in oil prices.

OPEC and its allies had been expected to adhere to the production-cut agreement to curb 1.8 million barrels of oil per day through 2018 but that now looks increasingly unlikely as major oil producers consider exiting the deal.

“The moment is coming when we should consider assessing ways to exit the deal very seriously and gradually ease quotas on output cuts,” Novak said in televised comments, according to Reuters.

Over recent weeks, oil prices had rallied sharply on expectations that falling Venezuelan and Iranian output would disrupt global supplies.

Oil prices snapped a three-week winning streak and suffered their biggest weekly fall since February.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.