Oil fell to a three-month lows on Monday as oil production in U.S. continues to increase. West Texas Intermediate for April delivery fell 0.37 percent to $48.31 a barrel on the New York Mercantile Exchange. While Brent for May settlement fell 6 cents to $51.31 a barrel on the London-based ICE Futures Europe exchange.
U.S. drillers added oil rigs last week, according to data Friday from Baker Hughes. This offset OPEC’s efforts to reduce oil production and lift the oil price. U.S. crude inventories rose by 8.2 million barrels to 528.4 million barrels. Production also increase by 56,000 barrels a day to 9.088 million barrels.
“It will be interesting to see how OPEC rhetoric will evolve with this price correction. Is price the only consideration when it comes to the decision of extending cuts?” BNP Paribas global head of commodity strategy Harry Tchilinguirian, Reuters reported.
Oil price fell more than 8 percent last week, the biggest one week decline in four months. “The week ahead is packed with potentially market defining releases,” Michael McCarthy, chief market strategist at Sydney’s CMC Markets, said. “However, the key to market performance this week is the response to the U.S. lift in rates.”