Pressured by data revealing a rise in the number of active domestic rigs and forecasts predicting increased production, oil prices dropped on Monday, according to Bloomberg MarketWatch.
May West Texas Intermediate crude fell 53 cents, or 1%, to settle at $52.65 a barrel on the New York Mercantile Exchange.
On the London ICE Futures Exchange, June Brent crude, the global benchmark, also fell 53 cents, or 1%, to end trading at $55.36 a barrel.
Shortly before the New York Mercantile Exchange settlement on Monday, a monthly report from the Energy Information Administration forecast a rise of 124,000 barrels a day in May to 5.193 million barrels a day for crude oil production in seven major U.S. shale oil plays.
New well oil output per rig in the Permian Basin was forecast at 662 barrels a day in May on a rig-weighted average, unchanged from April, according to the EIA. Contrary to this latest forecast, one energy trader indicated the average productivity of a Permian Basin rig before April 2009 was less than 100 barrels a day.
“This, along with the increasing rig count and another increase in the [drilled but uncompleted] well count (up another 111 wells), means that U.S. production supply will continue to move up,” said Curt Taylor, president of Opportune LLP’s Ralph E. Davis Associates.
Traders have been concerned that growing domestic output will offset OPEC’s efforts to rebalance global oil supply and demand.
Back on the New York Mercantile Exchange, May natural gas fell 2% to settle at $3.163 per million British thermal units.