Crude oil was weaker on Monday as US oil production showed no signs of slowing down.
On Friday, data from oilfield-services company Baker Hughes showed that the oil-rig count rose for a 9th straight week. The count climbed by 14 to 631, the highest level since September 25, 2015.
All the new rigs were horizontal — the types that created the huge output levels in America’s shale boom.
The total rig count is still 978 from its peak before the impact of the oil crash hit drillers, but that gap continued to shrink last week.
The May contract of West Texas Intermediate crude oil futures, the US benchmark of oil prices, fell 1.6% to $US48.54 per barrel.
Last week Tuesday, oil fell to the lows of the year, below $US48, after the Organisation of Petroleum Exporting Countries’ monthly report showed that Saudi Arabia’s output was above 10 million barrels in February.
Saudi and some other OPEC members agreed in November to reduce their production, and so help support oil prices. US oil producers, who are shut out of such a deal by anti-trust laws, continue to keep global inventory levels high. The deal is up for renewal in June.