NEW YORK: Oil prices fell more than 3 percent on Monday, with US crude hitting April lows, weighed by a survey showing output in OPEC reached record highs last month amid the biggest addition of US oil rigs in two years.
Production in July by the Organization of the Petroleum Exporting Countries likely rose to its highest in recent history, a Reuters survey found on Friday, as Iraq pumped more and Nigeria squeezed out additional crude exports despite militant attacks on oil installations.
Saudi Arabia also kept output close to a record high, the survey found, as it met seasonally higher domestic demand and focused on maintaining market share instead of trimming supply to boost prices.
US oil drillers, meanwhile, added 44 rigs in July, the most in a month since April 2014, data from oil services company Baker Hughes showed.
US West Texas intermediate (WTI) crude fell $1.35, or 3.3 percent, to $40.25 a barrel by 1533 GMT. It earlier plumbed $40.18, the lowest since April 20.
Brent crude was down $1.38, or 3.2 percent, at $42.15 a barrel, after a session low at $42.04.
Both benchmarks fell around 15 percent in July, with the decline being WTI’s largest monthly drop in a year.
“Sentiment remains quite negative following the price slump recently,” said Eugen Weinberg at Commerzbank.
“It is negative because rebalancing takes longer than some market participants thought before.”