Oil prices were flat on Monday after diving 13 percent since late May as rising production in the United States, Libya and Nigeria have foiled an OPEC-led effort to support the market by cutting production.
Brent futures for August were down 4 cents, or 0.1 percent, at $47.33 a barrel by 11:39 a.m. EDT (1539 GMT), while U.S. crude for July was down 9 cents, or 0.2 percent, at $44.65 per barrel the day before the July contract expires.
The premium of the Brent front-month over the same month for WTI <WTCLc1-LCOc1> is now at its highest since late May, when producers led by the Organization of the Petroleum Exporting Countries extended by nine months its pledge to cut output by 1.8 million barrels per day.
“Lack of major upside price response to the OPEC output cuts upping the odds of reduced compliance to the agreement in our opinion,” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.
OPEC supplies actually jumped in May as output recovered in Libya and also Nigeria, two countries exempt from the production cut agreement.
Analysts also said a steady rise in U.S. crude production has also fed the global crude glut. Data on Friday showed a record 22nd consecutive week of increases in the number of U.S. oil rigs, bringing the count to 747, the most since April 2015.
“There is no reason to be overly optimistic at the moment,” said Commerzbank analyst Carsten Fritsch.
Libya’s oil production has risen more than 50,000 bpd to 885,000 bpd after the state oil company settled a dispute with Germany’s Wintershall, a Libyan oil source told Reuters.
Investment bank Goldman Sachs said if the U.S. rig count holds, fourth-quarter domestic oil production would rise 770,000 bpd from the same period last year in the Permian, Eagle Ford, Bakken and Niobrara shale oilfields.
There are also indicators that demand growth is stalling in Asia, the world’s biggest oil-consuming region, even though China increased the 2017 oil import quotas for its refineries.
Japan’s customs-cleared crude imports fell 13.5 percent in May from a year earlier. India took in 4.2 percent less crude in May than the year before.
Saudi Arabia’s crude exports in April fell to 7 million bpd, official data showed. Saudi Energy Minister Khalid al-Falih said the oil market needed time to rebalance.