Crude oil prices settled lower as fears of rising U.S. production persisted amid an uptick in U.S. oil rigs while Saudi’s ramp up in diesel and gasoline exports to a record in January added to negative sentiment.
On the New York Mercantile Exchange crude futures for May delivery fell 28 cents to settle at $62.06 a barrel, while on London's Intercontinental Exchange, Brent lost 13 cents to trade at $66.08 a barrel.
Despite keeping crude production below an OPEC-agreed cap, Saudi Arabia ramped up its shipments of diesel, gasoline and other fuels surged by 27% to a record 1.912 million barrels a day (bdp) in January, according to data from the Joint Organisations Data Initiative in Riyadh.
OPEC and Russia agreed in November to extend the 1.8 million bpd output cuts through 2018, to rid the market of excess supplies.
Also weighing on oil prices were signs of an ongoing increase in U.S. oil output after the number of the number of oil rigs operating in the U.S. rose by four to 796, according to 800, according to data Friday from energy services firm Baker Hughes.
Yet, offsetting the negative sentiment on oil prices somewhat was the prospect of a tick higher in Middle East geopolitical tensions as Saudi Crown Prince Mohammad Bin Salman is expected to up the ante against Iran on his visit to the United States this week.
The fall in crude prices comes as data Friday showed the traders reduced their bullish bets on oil prices for the second-straight week amid fears over rising US output.
U.S. oil output hit a record last week rising to 10.38 million bpd, according to the Energy Information Administration. The ramp up has been cited as the main headwind, threatening OPEC’s efforts to slash global crude supplies to the five-year average.