Investing.com - Oil prices drifted lower on Monday, as concern over rising production in the U.S. dampened sentiment.
Data from the U.S. Energy Information Administration showed last week that total domestic crude production edged up by 79,000 barrels a day to 9.5 million barrels, its highest level since July 2015.
That comes despite data showing that U.S. energy firms cut rigs drilling for new oil for a second week in three. Drillers cut five oil rigs in the week to Aug. 18, bringing the total count down to 763, oilfield services firm Baker Hughes said Friday.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.
The U.S. West Texas Intermediate crude September contract was at $48.52 a barrel by 3:25AM ET (0725GMT), down 14 cents, or around 0.3%.
Elsewhere, Brent oil for October delivery on the ICE Futures Exchange in London shed 16 cents, or about 0.3%, to $52.58 a barrel.
Oil prices settled sharply higher on Friday, jumping about 3% in a surprise rally after reports surfaced that a unit at Exxon (NYSE:XOM) Mobil’s Baytown, Texas refinery shut down. The 584,000 barrel-a-day plant is the second-largest refinery in the U.S.
Despite Friday's rally, New York-traded oil prices ended the week down 31 cents, or nearly 0.6%, its third such loss in a row. In contrast, London-traded Brent futures notched a weekly gain of 62 cents, or roughly 1.2%.
The global benchmark has been buoyed by recent signs that global supplies are tightening.
OPEC and 10 producers outside the cartel, including Russia, agreed since the start of the year to slash 1.8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Elsewhere on Nymex, gasoline futures for September declined 1.7 cents, or nearly 1.1%, to $1.605 a gallon, while September heating oil slumped 0.9 cents, or 0.6%, to $1.610 a gallon.
Natural gas futures for September delivery tacked on 0.9 cents, or roughly 0.3%, to $2.902 per million British thermal units.