US benchmark West Texas Intermediate (WTI) for September delivery was at US$43.57, down from US$43.87 on Friday in New York – its lowest close since Mar 17. Brent crude for September was trading at US$48.25 after ending at US$48.61 on Friday.
“It’s still a supply story,” Jonathan Barratt, chief investment officer at Ayers Alliance Securities, told Bloomberg News. “There is not a lot of upside for oil.”
Concerns about a global supply glut were stoked on Friday when Baker Hughes said the number of US drilling rigs rose for the third straight week.
The count rose to 670, the oil-field services firm reported – its fifth weekly gain in six – just days after the US government reported an increase in oil production in the world’s top consumer.
A glut in crude oil supply is seen as the main driver for a sharp decline in oil prices that has seen crude slump to almost a third of its mid-2014 peaks.
News of rising US production comes as top producing cartel OPEC has refused to cut output, and as investors wait for Iran to ramp up exports after a major deal over its nuclear programme last month.
In exchange for curbing its nuclear activities, Tehran will see the lifting of sanctions, which have slashed its oil exports. Investors predict crude prices will remain under pressure for the rest of the year, particularly after trade and inflation data added to concerns about China’s economy over the weekend.
“We’re expecting oil prices not to recover at all in the second-half,” Mark Pervan, head commodity research at Australia’s ANZ bank, told Bloomberg.