Investing.com - Oil prices dipped on Monday morning in Asia, pulled down by a rising U.S. rig count which indicated further increases in the country’s crude output.
Crude Oil WTI Futures for June delivery were trading at $68.28 a barrel in Asia at 11:20PM ET (03:20 GMT), down 0.18%. Brent Oil Futures for June delivery, traded in London, were down 0.08% at $74 per barrel.
Meanwhile, Shanghai Crude Oil WTI Futures for September delivery were down 0.18% at 439.10 yuan ($69.75) per barrel.
U.S. drillers added five oil rigs drilling for new production in the week ending April 20, bringing the total count to 820, the highest since March 2015. The rising rig count points to further increases in U.S. crude production, which has already jumped by a quarter since mid-2016 to a record 10.54 million barrels per day (bpd).
Only Russia currently produces more, at almost 11 million bpd. The U.S. is expected to surpass Russia and become the world’s largest producer by 2019.
Despite the dips in crude oil prices, overall markets remain well supported by healthy demand and ongoing supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
OPEC, Russia and several other oil producers have been cutting output since January 2017 in an attempt to reduce the global oversupply and prop up prices. Results are closing in on the original target of the pact - reducing industrialized nations’ oil inventories to their five-year average.
The pact has been extended to the end of 2018 and OPEC will meet in June to review policy. Saudi Arabia has indicated that it does not want the supply restraint to end. Over the past year, the kingdom has emerged as OPEC’s leading supporter of measures to boost prices.
Oil prices have also been supported by the possibility that the U.S. will renew sanctions on Iran, which will be decided by May 12. This could further tighten global oil supplies as Iran is OPEC’s third-largest producer.
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