Investing.com – WTI crude oil prices settled higher Monday, but were under pressure as Canada's Syncrude operations are set to resume activity sooner than expected, while signs of rising U.S. output added to concerns.
On the New York Mercantile Exchange crude futures for August delivery rose 5 cents to settle at $73.85 a barrel, while on London's Intercontinental Exchange, Brent rose 1.4% to trade at $78.17 a barrel.
Suncor Energy said Monday its Syncrude oil sands project in Canada would resume some production in July, sooner than expected, and hit full capacity in September, following an outage last month that disrupted total output.
This could boost crude supplies across North America at a time when inventories at Cushing, Okla., the delivery point for U.S. crude futures, fell to their lowest level in 3-1/2 years.
Cushing inventories fell to 27.78 million barrels for the week ended June 29, according to the Energy Information Administration.
The tentative start to the week for WTI crude oil prices emerged as investors continued to weigh the impact on global crude stockpiles of ongoing supply outages in Libya against increased output from OPEC producers.
Libya's national oil output has dropped to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February, the head of the National Oil Corporation said on Monday.
In a bid to prevent a global crude supply shortage – amid rising oil demand and ahead of U.S. sanctions on Iran – Saudi Arabia reportedly raised output by 458,000 barrels a day (bpd) in June from the prior month.
But market participants continue to expect that oil demand will outstrip supply as major oil producing countries have little spare capacity.
Gains in U.S. crude oil prices, meanwhile, were limited as investors continued to digest data released Friday from Baker Hughes showing the number of U.S. oil drilling rigs in operation rose by 5 to 863 in the week to June 29.
Rising U.S. rig counts – widely viewed as a sign of increased activity in the sector – has shifted the focus to domestic crude output growth.
The Energy Information Administration forecasts U.S. crude production to average a record 11.8 million barrels a day next year, from current levels at about 10.9 million barrels a day.