Prices of oil collapses due to surging U.S. production

Oil Prices

Monday, due to the persistent rise in U.S. crude production, prices of oil collapsed on Monday, after capping a positive settlement the previous session. The international benchmark: Brent crude futures, was seen settling at $68.87 a barrel, which was 0.5% or 34 cents lower from their previous close.

Meanwhile, the United States West Texas Intermediate settled at $62.02 per barrel, which was 0.5% or 32 cents lower from their last close. Prices of oil rose last week due to robust global crude demand as well as concerns over the rising tension in the Middle East due to reports indicating that the United States is putting pressure on its European allies over Iran Nuclear Deal.

The current changes in the stance of oil prices were affected by analysts and investors’ concerns over the continuous rise in U.S. crude productions. In accordance to this, a report from Baker Hughes indicated that U.S. drillers currently added four oil rigs in the week to March 16, conducting an approximate total count of 800.

In addition, United States rig counts is also much higher from 2017, when 631 rigs were active as energy companies resumed to boost spending since mid-2016 as oil prices recovers from a two-year crash. The continuous rise in U.S. production have exceeded the top-exported: Saudi Arabia by 10.38 million barrels per day, which was an inch below Russia’s 11 million barrels per day; analysts are expecting U.S. crude output to surpass Russia’s crude production later this year.

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