Investing.com – Oil prices edged lower in European trading on Monday, giving back small overnight gains as the market weighed a relentless increase in U.S. drilling against ongoing efforts by major producers to cut output and reduce a global glut.
The U.S. West Texas Intermediate crude July contract was at $45.70 a barrel by 3:10AM ET (0710GMT), down 13 cents, or around 0.3%. It touched its lowest since May 5 at $45.20 last Thursday.
Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London declined 11 cents to $48.04 a barrel. The global benchmark sank to $47.40 late last week, a level not seen since May 5.
Oil prices suffered their third straight weekly loss last week, amid concern that the ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance the market remained in focus.
Energy services company Baker Hughes said on Friday that U.S. drillers last week added rigs for the 21st week in a row, the longest such streak on record, implying that further gains in domestic production are ahead.
The U.S. rig count rose by 8 to 741, extending a year-long drilling recovery to the highest level since April 2015.
The increase in U.S. drilling activity and shale production has mostly offset efforts by OPEC and other producers to cut output in a move to prop up the market.
Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.
So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, and a relentless increase in U.S. shale oil output.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
Natural gas futures for July delivery dipped 2.1 cents to $3.018 per million British thermal units.
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About Oklahoma Minerals Founder GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.