LONDON. — Oil prices fell yesterday, pulled down by rising Russian production and the highest US drilling activity in more than three years. Analysts expect higher US output to offset supply curbs by the Organisation of the Petroleum Exporting Countries (OPEC), which have been in place for 18 months and have pushed up prices significantly over the past year.
Benchmark Brent crude LCOc1 was down 65 cents at $75,81 a barrel by 1330 GMT. US light crude CLc1 fell 60 cents to $65,14.
The number of new rigs drilling for oil in the United States rose by one last week to 862, its highest since March 2015, data from energy services company Baker Hughes showed. That suggests US crude output, already at a record 10,8 million barrels per day (bpd), will climb further.
Russian news agency Interfax said on Saturday that Russia’s oil output had risen to 11,1 million bpd in early June, up from slightly less than 11 million bpd for most of May and above its target output of under 11 million bpd. But markets are worried by falling supply from Venezuela and the potential of lower exports from Iran. Venezuelan production is falling because of sanctions, economic crisis and mismanagement, while Iran faces US sanctions over its nuclear program that are likely to curb exports in the next few months.
“Sentiment is caught in a tug of war between the drop in supply from Iran and Venezuela and the prospect of rising output from OPEC/non-OPEC coupled with rampant US shale production,” said Stephen Brennock, analyst at brokerage PVM Oil Associates. — Reuters.