Pipelines run to Enbridge Inc.'s crude oil storage tanks at
their tank farm in Cushing, Oklahoma, U.S., March 24, 2016.
REUTERS/Nick Oxford/File Photo
Oil prices slipped on Monday as U.S. production hit a record high and OPEC members considered boosting supply.
Benchmark Brent crude oil lost $1.26 a barrel, or 1.6 percent,
reaching a low of $75.53 before recovering to $76.29, down 50 cents, by
1330 GMT.
U.S. light crude was unchanged at 65.81 a barrel. The U.S. contract
lost about 3 percent last week after a decline of nearly 5 percent the
previous week.
"A sea of red is washing over the energy complex as rising U.S.
production coupled with a looming relaxation in OPEC-led cuts sends
bulls scurrying for the exits," said Stephen Brennock, analyst at London
brokerage PVM Oil Associates.
U.S. crude production climbed in March to 10.47 million barrels per
day (bpd), a monthly record, data from the Energy Information
Administration showed last week.
U.S. drillers added two oil rigs in the week to June 1, bringing the
total to 861, the most since March 2015, energy services company Baker
Hughes said on Friday. That was the eighth time drillers have added rigs
in the past nine weeks.
Arab oil ministers agreed over the weekend on the need for continued
cooperation between members of the Organization of the Petroleum
Exporting Countries (OPEC) and other big producers to balance global
supply, Kuwait's state news agency KUNA reported on Sunday.
OPEC ministers from Saudi Arabia, the United Arab Emirates, Kuwait
and Algeria, along with their counterpart from non-OPEC Oman, met
unofficially in Kuwait on Saturday.
OPEC meets formally on June 22 to set oil policy. It is expected to
agree to raise output to cool the market amid worries over Iranian and
Venezuelan supply and after Washington raised concerns that the oil
rally was going too far, OPEC sources familiar with the discussions told
Reuters last month.
Saudi Arabia, the effective OPEC leader, and Russia have discussed
boosting output to compensate for supply losses from Venezuela and to
address concerns about the impact of U.S. sanctions on Iranian output.
Russia's largest oil producer, Rosneft , will be able to restore
70,000 bpd of oil output in only two days if global production limits
are lifted, Renaissance Capital wrote in a client note.
Hedge funds and other money managers have cut their bullish wagers
on U.S. crude futures and options, according to data released on Friday,
as oil prices slumped on oversupply fears.
(Additional reporting by Naveen Thukral in Singapore; Editing by David Goodman and Mark Potter)
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