Oil prices fell on Monday, with a Reuters survey showing Saudi Arabia has boosted supplies to a near-record 10.7 million barrels per day (bpd) in a sign the world’s top crude exporter wants to make up for disruptions elsewhere. Brent crude oil futures were at $78.52 per barrel at 0058 GMT, down 71 cents, or 0.9 percent, from their last close. U.S. West Texas Intermediate crude futures were down 71 cents, or 1 percent, at $73.44 a barrel, after rising more than 8 percent last week.
Saudi Arabia’s output is up 700,000 bpd from May, a Reuters survey found on Friday, and close to its 10.72 million bpd record from November 2016, more than making up for disruptions elsewhere within the Organization of the Petroleum Exporting Countries (OPEC). U.S. President Donald Trump said over the weekend that Saudi Arabia had promised Washington it was ready to raise output if needed.
“If his (Trump’s) entreaty to the Saudis to prime the pumps and get them producing again proves correct, then it will go a long way to redress the supply disruptions,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Voluntary supply cuts by OPEC and some non-OPEC suppliers like Russia have tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new U.S. sanctions against major exporter Iran have sparked concerns of supply shortfalls.
Despite the apparent supply relief from Saudi Arabia, oil markets remain tense over escalating trade disputes between the United States and other major economies including China and the European Union, as well as the looming new U.S. sanctions against Iran. Trump warned close U.S. allies in an interview that aired on Sunday with a threat to sanction European companies that do business with Iran.