Crude oil prices edged slightly lower on Monday, weighed down by growing fears of a global supply surplus and renewed speculation about a possible nuclear deal between the United States and Iran.
At $64.18 a barrel, the global benchmark, Brent crude, fell 0.53% from the previous Friday’s finish of $65.41. During the same time frame, the benchmark West Texas Intermediate (WTI) crude for the United States was trading at $61.64 per barrel.
Investor sentiment continues to be weighed down by the ongoing uncertainty surrounding the U.S. Federal Reserve’s future monetary policy decisions, diplomatic developments between Russia and Ukraine, and evolving reports of a likely increase in global crude output.
Talks regarding a new U.S. nuclear proposal to Iran have resurfaced, igniting fresh concerns that a successful deal could flood the market with Iranian oil, intensifying fears of oversupply. Though trade friction between the U.S. and China has recently eased, questions remain over the longer-term impact of former President Donald Trump’s protectionist “America First” economic agenda.
Additional pressure on prices came from the International Energy Agency’s (IEA) recent Oil Market Report, which revealed that global oil production in April rose by 160,000 barrels per day compared to March, bringing the total to 104.46 million barrels per day.
An important measure of near-term output, the number of active oil rigs in the US, decreased little. The number of rigs in the United States decreased by one last week, to 473 for the week ending May 16, according to energy services firm Baker Hughes. This represents a 24 rig drop from the previous year, which is indicative of a slower rate of domestic output.
