Investing.com - Crude prices sank lower on Monday amid Iran’s suggestion that an extension of the OPEC-led production curb may no longer be necessary and a steady increase in U.S. production levels.
New York-traded West Texas Intermediate crude futures fell 68 cents, or about 1.0%, to $67.72 a barrel by 11:05AM ET (15:05GMT).
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded down 24 cents, or roughly 0.3%, to $73.82 a barrel.
OPEC and 10 producers outside the cartel, including Russia, have been holding back oil output by around 1.8 million bpd since the start of last year to slash global inventories to the five year-average. The arrangement is set to expire at the end of 2018.
The cartel will meet in June to decide whether the production-cut agreement should be adjusted based on market conditions.
Iran's oil minister Bijan Zanganeh reportedly said that if crude oil prices continued to rise there would be no need to extend the agreement.
“There will be no decision on this in OPEC's next meeting ... if oil prices continue to increase, there will be no need to extend the deal,” Zanganeh was quoted as saying on the Iranian ministry’s website SHANA.
Also putting downward pressure on oil prices Monday was a rise in U.S. drilling for new production.
U.S. drillers added five oil rigs in the week to April 20, bringing the total count to 820, Baker Hughes energy services firm said in its closely followed report on Friday. That was the highest number since March 2015, underscoring worries about rising U.S. output.
Indeed, domestic oil production - driven by shale extraction - rose to an all-time high of 10.54 million barrels per day (bpd) last week, the Energy Information Administration (EIA) said. Only Russia produces more at almost 11 million bpd.¡
Analysts and traders are concerned that booming U.S. shale oil production could potentially derail OPEC's effort to end a supply glut.
In other energy trading, gasoline futures rose 0.5% to $2.0967 a gallon by 11:06AM ET (15:06GMT), while heating oil lost 0.1% to $2.1200 a gallon.
Natural gas futures gained 0.01% to $2.769 per million British thermal units.