Oil prices pull away from $80 amid reports of higher supply

Oil prices declined on Monday, snapping their last week’s rally towards $80-level, amid reports of higher production from Saudi Arabia.

International benchmark Brent crude was last trading down 1.2 percent at $78.28 per barrel (bbl), while US West Texas Intermediate crude futures were at $73.48/bbl – down 0.9 percent.

US President Donald Trump tweeted on Saturday that King Salman had agreed to produce more oil. However, the White House later clarified that Saudi Arabia had said it has spare capacity and can raise oil production if needed.

“Although the US administration swiftly backed off Trump’s tweet, the prospects of higher supply in the markets is likely to weigh on oil,” futures brokerage firm FXTM said in a note.

“It must be kept in mind that US Shale production has reached a record 3 million barrels a day. The threat of soaring production in US shale fields and rising output from OPEC and Russia rekindling oversupply concerns may weigh heavily on oil prices,” it added.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com