Investing.com – Crude settled lower on Monday, as investors questioned whether an OPEC-led production cut would be extended beyond June amid worries over a glut in supply.
On the New York Mercantile Exchange crude futures for May delivery shed 24 cents to settle at $47.73 a barrel, while on London's Intercontinental Exchange, Brent lost 8 cents to trade at $50.84 a barrel.
Oil prices fell to November lows during the U.S. session, as concerns over a glut in U.S. inventories, continued to weigh on sentiment, despite an agreement from a join committee of ministers from OPEC and non-OPEC oil producers to review whether the current OPEC-led deal to cut production should be extended for an additional six-months.
Investors focused on a significant change in tone from the joint committee, as an earlier draft of the statement had said the committee “reports high level of conformity and recommends a six-month extension” but the final version omitted the recommendation, and called for “a technical group and the OPEC Secretariat to review oil market conditions and revert … in April 1017”
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd) in an effort to combat the oversupply issue that has pressured prices over the last two years.
Investors fear that the sharp increase in U.S. crude and shale production could dampened OPEC’s efforts to rebalance supply and demand in the industry, after a report last week revealed U.S. crude oil stockpiles rose to an all-time high of 533.1 million barrels.
Meanwhile, investors braced for a fresh batch of weekly inventories data from the Energy Information Administration (EIA) due to be released on Wednesday, March 29 at 10:30 EDT.