Investing.com – Crude oil prices settled lower on Monday as signs of ongoing expansion in U.S. output and uncertainty over whether OPEC would ease production limits continued to weigh on sentiment.
On the New York Mercantile Exchange for July delivery fell 1.61% to settle at $64.75 a barrel, while on London’s Intercontinental Exchange, fell 2.03% to trade at $75.22 a barrel.
The number of oil rigs operating in the US increased by 2 to 861, 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.
The uptick in drilling activity emerges as the Energy Information Administration said last week U.S. oil output rose 215,000 barrels per day to a record 10.47 million barrels per day in March.
Oil prices were also held back by uncertainty over whether OPEC and its allies would ease curbs on production limits to plug the gap from falling supplies in Venezuela and an expected drop in Iran oil exports as U.S. sanctions loom.
OPEC in its most recent report said the production-cut agreement had helped slashed excess global oil supplies to just above the five-year average.
In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018 and is expected to come under review at OPEC’s meeting on June 22.
The weaker start to crude prices arrived on the back of a 5% slump last week as traders continued to slashed their bets on further upside in oil prices, according to data released Friday.
data last week showed speculative net long positions in WTI crude oil fell to 324,235 from 377,520 in the prior week.
The negative sentiment on oil prices comes despite analysts continuing to tout higher oil prices amid strong oil demand growth and robust fundaments.
“We continue to forecast 1.8 million barrels per day in 2018 global oil demand growth, ahead of the IEA forecast of 1.4 million barrels per day,” Goldman Sachs said.
“Global GDP is tracking above 4.0%, supporting robust demand statistics in the US, China, India and Southeast Asia. Strong oil demand trends support our Brent forecast of $75 to $80 barrels for the remainder of the year,” the bank added.
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Source: Investing.com
