Oil price falls as U.S. supply grows

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Oil prices slid on Monday, with US crude futures dropping to their lowest since April 10, breaking below technical support levels as investors kept selling on growing USA production, possible global supply growth and nagging trade tensions.

The rare request came after US retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising oil prices on Twitter.

"Markets are forward-looking. The fact that Russia, Saudi Arabia and OPEC more broadly have started discussing raising output levels, you've got this pretty swift correction", said Tyler Richey, co-editor of the Sevens Report in Jupiter, Florida.


In March, US crude output rose to 10.47 million barrels per day, the highest on record, according to a monthly report by the Energy Information Administration (EIA).

At 1326 GMT, ICE August Brent was $1.16 lower at $74.13/b.

WTI for July delivery dropped 24 cents to US$64.51 a barrel on the New York Mercantile Exchange.


"A sea of red is washing over the energy complex as rising USA production coupled with a looming relaxation in OPEC-led cuts sends bulls scurrying for the exits", said Stephen Brennock, analyst at London brokerage PVM Oil Associates.

The cartel and other supply-cutting countries led by Russian Federation announced coordinated oil production cuts in 2016 in an effort to tackle a global glut that was sinking prices.

The most recent comments by Trump and the request for extra oil are among the most forceful U.S. intervention in Opec affairs since Bill Richardson, the energy secretary during the second administration of Bill Clinton, phoned the Saudi minister in the middle of an OPEC meeting in 2000 asking for a production increase.


The U.S. request to raise output has been made unofficially from Washington to each of the oil producers rather than to the Organization of the Petroleum Exporting Countries as a group, the sources said. This mainly led to rise in crude oil prices in futures trade here. "We are going into summer, the high demand season, and I think we are going to see a fall in United States crude oil inventories, but shale oil output is growing".

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