Oil futures finished lower Monday as concerns over the potential for a sizable increase in domestic crude oil production outweighed support from Saudi Arabia’s energy minister, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, March West Texas Intermediate crude fell by 47 cents, or 0.9%, to settle at $52.75 a barrel.
March Brent crude, the global benchmark, lost 26 cents, or 0.5%, to end trading at $55.23 a barrel on the London ICE Futures Exchange.
Oil prices gained traction over the weekend after Saudi energy minister, Khalid al-Falih, voiced confidence that a major international deal to curb production was draining the market of excess supply. Al-Falih said members of OPEC and non-OPEC nations are complying with the deal but continued worries about production weighed on prices.
“Production cuts are priced into the market, but U.S. oil production and investment appear to be increasing and futures market speculation is reaching the highest level in two years,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, adding that “oil prices are somewhat vulnerable in the near term.”
Goldman Sachs now forecasts domestic oil production will grow by 265,000 barrels a day this year from last if the dormant rigs come back online between September last year and June.
Meanwhile, February natural gas rose 3.9 cents, or 1.2%, to end trading at $3.243 per million British thermal units on the New York Mercantile Exchange.