Investing.com - Oil prices struggled near three-month lows in European trade on Monday, as signs of increasing production in the U.S. and rising output among members of the Organization of the Petroleum Exporting Countries weighed.
Crude oil for September delivery on the New York Mercantile Exchange fell to a session low of $41.22 a barrel. It was last at $41.48 by 07:49GMT, or 3:49AM ET, down 12 cents, or 0.29%.
On Friday, New York-traded oil sank to $40.57, a level not seen since April 20, after data showed that the U.S. oil rig count rose for the fifth week in a row last week.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by three to 374, the fifth straight weekly gain and the eighth increase in nine weeks.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
New York-traded oil futures lost $2.60, or 5.86%, last week, the second weekly decline in a row. For July, U.S. oil prices dropped 14%, its worst monthly performance in a year.
WTI crude futures are nearly 20% lower from their 2016 highs above $50 a barrel scaled in early June, technically placing it in bear market territory, as signs of an ongoing recovery in U.S. drilling activity combined with elevated stocks of fuel products weighed.
According to the U.S. Energy Information Administration, gasoline inventories increased by 452,000 barrels last week. Despite being in the midst of the peak summer-driving season in the U.S., gasoline stocks are well above the upper limit of the average range, according to the EIA.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery inched down 5 cents, or 0.11%, to $43.48 a barrel, after falling to a more than three-month low of $42.52 on Friday.
Last week, London-traded Brent futures declined $3.24, or 7.07%, the second straight weekly fall. Brent prices ended July with a monthly loss of 12.7% as prospects of increased exports from Middle Eastern and North African producers, such as Iraq, Nigeria and Libya, added to concerns that a glut of oil products will cut demand for crude by refiners.
OPEC's oil output is likely in July to reach its highest in recent history, a Reuters survey found on Friday, as Iraq pumps more and Nigeria manages to export additional crude despite militant attacks on oil installations.
Supply from the Organization of the Petroleum Exporting Countries has risen to 33.41 million barrels per day (bpd) in July from a revised 33.31 million bpd in June, according to the survey based on shipping data and information from industry sources.
Meanwhile, in Libya, the country's government reached a deal with a brigade controlling the Ras Lanuf and Es Sider oil ports, the major oil terminals that have been shut since December 2014, to restart exports there as part of a political agreement, officials said Friday.
Brent is down almost 18% since peaking above $50 in early June, as high inventories of gasoline products cloud the future outlook for crude.
According to market experts, elevated stocks of fuel products amid slowing global demand growth is expected to keep prices under pressure in the near-term.
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