OPEC should beware as US shale producers are set to steal a bigger slice of the market in Asia, which consumes more oil than any other region, according to industry consultant Wood Mackenzie Ltd.
Oil prices fell on Monday on expectations that US output will rise this year, erasing earlier gains buoyed by lower weekly USA rig counts and falling USA unemployment.
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading mixed early Monday. Gross short positions on the New York Mercantile Exchange climbed to their highest in almost a month.
Brent crude futures-where Nigeria's oil is pegged-sold at $64.77 per barrel, down 18 cents, or 0.3 percent. Only Russia pumps more, at almost 11 million bpd.
U.S. tight oil production, or shale fracking, should rise by 131,000 barrels a day in April, to a record of 6.95 million barrels a day, according to the U.S. Energy Information Administration's latest drilling report released this week. However, the USA has simply filled the supply gap created by OPEC producers by ramping up production.
"The longer the deal goes on, it's going to start falling apart", Patterson said in an interview in Singapore, referring to an output-cut agreement between the Organization of Petroleum Exporting Countries and other producers including Russian Federation.
The news is expected to be light on Monday so most traders expect the price action to be driven by the U.S. Dollar and appetite for risk.
In oil markets, United States energy companies last week cut oil rigs for the first time in nearly two months, with drillers cutting back four rigs, to 796, Baker Hughes energy services firm said on Friday.
While US news has been dominated by the aluminum and steel tariffs proposed by President Donald Trump, the oil markets will not sustain significant price reactions, Poulsen said. At stake is OPEC's production limits, which are among factors helping the oil market's monthslong recovery. It was the first such decline in seven weeks. The dollar tends to have an inverse relationship with oil prices, as a weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies. The silver and copper fell by 0.19% and 0.42% respectively.