Oil fell as USA drilling continued to rise, undermining the potential for even an extended OPEC output-reduction deal to rebalance the market.
WTI (West Texas Intermediate) crude oil (RYE) (BNO) (IYE) futures for May delivery are near a four-month low as of March 20, 2017.
Brent crude was down 29 cents per barrel on Monday, easing 0.56 percent to trade at $51.47 per barrel.
Last week, both Brent and WTI crude oil traded in a $2.50 range as investors weighed the impact of the first oil cut from OPEC in eight years against rising US shale oil output and high inventories. The new lows come on the back of Friday's oil rig data from Baker Hughes, which said U.S. drillers added 14 rigs for a total of 631 last week, the most since September 2015.
Concerns that the OPEC production cut was failing to reduce the global supply overhang kept a lid on the market.
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The refusal by Saudi and Russian energy ministers as well as the OPEC secretary-general to commit to an extension of the OPEC/non-OPEC cuts, a big question for the market as the producers' output curb agreements close in on the half-way mark, continues to cast a shadow over the prospects of a speedy draining of oil inventories and an accelerated rebalancing of the market.
The US oil output also increased to 9.1 million barrels per day (BPD) from 8.5 million BPD in June 2016.
Defying rising sentiment that oil markets remain oversupplied, some analysts say markets will tighten soon, arguing that the Opec-led cuts will start to bite only from next month, just as demand picks up as refineries return from current maintenance outages.
Russian Federation undertook to slash oil production by 300,000 barrels per day in the first half of 2017 versus October 2016 within the framework of the OPEC agreement.