Investing.com - Crude oil futures turned lower on Monday, as bearish comments from Saudi Arabia's oil minister and a broadly stronger U.S. dollar weighed.
On the ICE Futures Exchange in London, Brent oil for June delivery shed 72 cents, or 1.13%, to trade at $62.73 a barrel during U.S. morning hours. Futures hit a session high of $64.34 earlier.
Oil turned lower after Saudi Arabian oil minister Ali al-Naimi said that the kingdom's production would stay near record peaks of around 10 million barrels per day in April.
Last week OPEC said that Saudi Arabia increased oil output by about 668,000 barrels a day in March from a month earlier to hit a total of 10.294 million barrels, the most in three decades, underlining concerns over a glut in global supplies.
Elsewhere, on the New York Mercantile Exchange, crude oil for June delivery touched an intraday peak of $58.30 a barrel, before reversing gains to trade at $56.84, down 48 cents, or 0.85%.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.5% to trade at 98.11 early on Monday.
The index lost 1.9% last week amid speculation the Federal Reserve could delay hiking interest rates until late 2015, instead of tightening midyear, after a recent run of soft economic data dampened optimism on the recovery.
Oil prices were higher earlier in the day amid speculation that U.S. oil production has peaked and after China's central bank cut banks' reserve requirement ratios in a surprise decision over the weekend.
Industry research group Baker Hughes (NYSE:BHI) said Friday that the number of rigs drilling for oil in the U.S. fell by 26 last week to 734, the lowest since 2010. It was the 19th straight week of declines.
Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
Meanwhile, the People's Bank of China lowered the amount of deposits it requires banks to hold as reserves to 18.5% from 19.5% in an effort to spur economic activity.
The move came after official data last week showed that China’s economy grew 7.0% in the first quarter, the slowest pace of growth since the global financial crisis in 2008.
Data on industrial production, retail sales and fixed asset investment also fell short of forecasts, indicating that China needs to act to prevent a further slowdown in the economy.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $4.43 a barrel, compared to $6.13 by close of trade on Friday.