Oil Slides From 9-week Highs as Market Looks to OPEC
Oil prices edged down from nine-week highs on Monday, pressured by worries over high production from OPEC and the United States.
Global benchmark Brent crude futures were down 67 cents, or 1.28 percent, at $51.75 a barrel at 1344 GMT. They traded as low as $51.56 a barrel earlier in the day.
U.S. crude futures were down 67 cents, or 1.35 percent, at $48.91 per barrel, but up from the day's low of $48.78 a barrel.
Both contracts stood more than $1 below the levels hit last week, which marked their highest since late May, when oil producers, led by the Organization of the Petroleum Exporting Countries, had extended a deal to reduce output by 1.8 million barrels per day (bpd) until the end of next March.
Doubts have since emerged about the effectiveness of the cuts because OPEC output hit a 2017 high in July and its exports hit a record.
"The market is looking for comment from Saudi Arabia signalling OPEC will meet its agreed target," Hans van Cleef, senior energy economist with ABN AMRO, said. "The possibility for (price) movement seems limited unless OPEC comes out with a statement."
Officials from a joint OPEC and non-OPEC technical committee are meeting in Abu Dhabi on Monday and Tuesday to discuss ways to boost compliance with the deal.
The doubts about the OPEC production deal outweighed the impact of a protest at Libya's Sharara oilfield, which led to a brief shutdown starting late on Sunday. The country's National Oil Corp. said production at the 270,000 bpd field was restarting on Monday.
High oil output in the United States counteracted other bullish factors, including a Baker Hughes report on Friday that showed a cut of one drilling rig in the week to Aug. 4, bringing the total count down to 765.
U.S. weekly oil production hit 9.43 million bpd in the week to July 28, the highest since August 2015 and up 12 percent from its most recent low in June last year.
Still, some analysts said strong words from OPEC could help to shore up prices.
"The negative price impact at the start of the week coming from OPEC and compliance focus will probably dissipate," SEB Markets chief commodities analyst Bjarne Schieldrop said.
"Saudi Arabia will restate that they will export only 6.6 million bpd (six-year low) in August and inventories will continue to draw down."
(By Libby George, Additional reporting by Jane Chung in Seoul and Henning Gloystein in Singapore)