Investing.com – WTI crude oil prices settled lower on Monday despite a rebound from session lows as a fall in U.S. supplies at a key delivery hub failed to offset concerns over a ramp up in Russian and Saudi output.
On the New York Mercantile Exchange crude futures for August delivery fell 21 cents, to settle at $73.94 a barrel, while on London's Intercontinental Exchange, Brent lost 0.5% to trade at $78.86 a barrel.
Information provider Genscape said U.S. crude inventories at Cushing had fallen in the week, according to traders. Stockpiles at the hub fell 3.2 million barrels in the week to June 22, but rose slightly in the four following days to June 26.
The fall in Cushing supplies come as a production shutdown at Canada's Syncrude, which has capacity to produce 350,000 barrels per day of oil, continued to drain crude supply across North America.
Crude oil prices started the session on the back foot as an increase in Saudi and Russian output weighed. While a tweet from U.S. President Trump on Saturday, claiming that Saudi Arabia’s King Salman had agreed to raise oil output by up to 2 million barrels per day (bpd) also knocked oil prices.
But analysts said that unless demand for crude oil falls, the underlying fundamentals of the oil market would continue to support higher oil prices amid ongoing supply disruptions.
Russian output rose to 11.06 million bpd in June from 10.97 million bpd in May, the Energy Ministry said on Monday. Saudi Arabia's output rose by 700,000 barrels per day (bpd) from May, a Reuters survey showed.
Unexpected disruptions in Canada, Libya and Venezuela have raised investor expectations that global oil demand would outstrip supply, keeping oil prices elevated.
Crude inventories are expected to come under further pressure in the coming weeks as the U.S. summer driving season gets underway, which usually sees an increase in gasoline demand.