U.S. West Texas intermediate crude oil and global Brent crude oil started the week lower as investors continued to respond to the previous week's steep decline fueled by massive hedge fund liquidation in reaction to rising U.S. supply.
According to the source, the price for April Futures WTI oil fell by 0,82%, which is $48,38 per barrel on the New York Mercantile Exchange (NYMEX).
Oil prices slipped succumbing to rising USA drilling activity and a steady supply from OPEC countries despite production cut deal. US WTI and Brent crude oil prices averaged $43.3 per barrel and $43.7 per barrel in 2016, respectively.
The increasing US oil production continued to weigh on OPEC's effort to rebalance the oil market.On November, 2016, OPEC and non-OPEC oil producers agreed to cut production of 1.8 million barrels per day.
Yet so far the cutback has not had the desired effect as compliance by involved exporters is patchy and as other producers, including the United States, have stepped up to fill the gap, resulting in crude prices falling more than 10 percent since the beginning of the year.
Oil prices settled at their lowest level in almost a week, as another rise in active US oil rigs renewed concerns over domestic production and some analysts anxious that a change to the G-20 policy statement may impact global trade.
The IEA said global inventories rose in January for the first time in six months despite OPEC output cuts, but said if it stuck to its production curbs, the market should see a deficit of 500,000 barrels per day (bpd) in the first half.
On Friday, energy services firm Baker Hughes reported USA drillers added oil rigs for the ninth consecutive week.
The International Energy Agency (IEA) has forecast Iran expanding its crude oil production by 400,000 barrels per day to 4.15 million bpd by 2022. Saudi Arabia's energy minister, Khalid Al-Falih, has said Opec will extend the deal if stockpiles are still above their five-year average.
Traders also said that healthy oil demand would help rebalance markets and support prices.