Oil dipped on Monday, paring some earlier losses triggered by rising drilling activity in the US and no let-up in supply growth from both members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC exporters, but the outlook remained gloomy.
Brent crude futures were last down 11 cents on the day at $46.60 a barrel by 1430 GMT, while US crude futures were last down 13 cents at $44.10 a barrel.
“The market is in trouble and looks very vulnerable to lower numbers,” PVM brokerage said in a note.
OPEC has agreed with some non-OPEC members to curtail production until March 2018 but the move has failed to eliminate a global glut of crude.
Several key OPEC ministers will meet non-OPEC Russia on July 24 in St. Petersburg to discuss the situation in oil markets.
Kuwait said on Sunday that Nigeria and Libya had been invited to the meeting and their production could be capped earlier than November, when OPEC is scheduled to hold formal talks, according to Bloomberg.
Libya said on Monday it was ready for dialogue but added that its political, economic and humanitarian situation should be taken into account in talks on caps.
Brent prices are 17 percent below their 2017 opening despite strong compliance by OPEC with the production-cutting accord.
BNP Paribas joined the growing list of investment banks and analysts that have cut their crude oil price forecasts for the coming year.
“The simple truth is that OPEC and Russia have to contend with the fact is that there is output growth elsewhere diluting their efforts at reducing supply,” the bank said in a note.
US energy firms added seven oil drilling rigs last week, marking the 24th week of increases out of the last 25 and bringing the count to 763, the most since April 2015, energy services company Baker Hughes said.
US oil production has risen more than 10 percent since mid-2016.
“This is the response of prices to news of increasing oil production in the US,” Commerzbank said in a note. “The US Department of Energy reported a marked rise in production that virtually reversed the previous week’s decline.”

Source: Arab News