Oil prices slid early on Monday as Iran vowed to ramp up output and rig reductions paused in the United States, then crude futures pared losses on data showing a stockpile drawdown at the U.S. delivery hub.
Oil fell $1 a barrel or more in early trade, the day after the Mehr news reported that Iran’s Deputy Oil Minister Rokneddin Javadi said the country’s crude exports, excluding gas condensates, would reach 2.2 million barrels per day (bpd) by the middle of summer from 2 million bpd now.
On Friday, an industry report showed the number of oil rigs operated by U.S. drillers held steady for the first time this year, following a near two-year slump in the count.
Oil pared losses after a report showed a stockpile drawdown at the Cushing, Oklahoma delivery hub for U.S. West Texas Intermediate (WTI) futures. Market intelligence firm Genscape reported an inventory drop of 978,862 barrels in Cushing during the week to May 20, traders who saw the data said.
WTI’s front-month was down 30 cents at $48.11 a barrel by 11:07 a.m. EDT (1507 GMT), after plumbing a session low at $47.40.
Brent’s front-month was down 52 cents at $48.20, off the day’s bottom of $47.58.
“Upward price momentum appears to be slowing as we feel that this late winter/spring bull move is in a very advanced stage with only about $3 to $4 a barrel remaining on the upside in referencing either WTI or Brent futures,” said Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates.