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 crude futures for July delivery fell 4% to settle at $67.88 a barrel, while on London's Intercontinental Exchange, Brent fell 2.98% to trade at $76.44 a barrel.
The number of oil rigs operating in the US jumped by 15 to 859, 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.