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Oil Prices Keep Dropping On Record U.S. Supply and Possible OPEC Supply Surge

Oil prices were down again on Monday morning in Asia

Investing.com - Oil prices were down again on Monday morning in Asia due to record U.S. output and continued expectations that OPEC producers may decide to boost output later this month.

Crude Oil WTI Futures for July delivery were trading at $65.75 a barrel at 10:40PM ET (02:40 GMT), down 0.09%. Brent crude futures for August delivery, traded in London, were down 0.30% at $76.56 per barrel.

U.S. crude production has risen relentlessly by more than a quarter in the last two years, inching ever closer to top producer Russia’s output of around 11 million bpd.

According to an Energy Information Administration announcement last Thursday, U.S. crude production rose in March to 10.47 million barrels per day (bpd), a monthly record.

Meanwhile, U.S. drillers are picking up the pace. General Electric (NYSE:GE) Co’s Baker Hughes energy services firm said on Friday that U.S. drillers added two oil rigs last week, bringing the total number to 861 which is a record since March 2015. This is also the eighth time they added rigs in the past nine weeks.

The Organization of the Petroleum Exporting Countries (OPEC) and other non-OPEC members including Russia are set to discuss the possible output increase later this month. Saudi Arabia, de-facto leader of OPEC, and Russia have discussed raising oil production in the second half of the year by some 1 million bpd to make up for potential supply shortfalls from Iran, who produced 4% of global supplies, and Venezuela.

In response to U.S. sanctions against Iran and the production plunge in Venezuela, OPEC and some non-OPEC producers will meet in Vienna on June 22 to review their commitment to curb their output by about 1.8 million barrels per day until the end of this year.

“Crude oil remained under pressure as the market remained focused on the discussion between OPEC members about whether they should increase production later this year,” said ANZ in a note. “In the U.S., the data also presented a gloomy picture. Crude oil production rose to another record, while drilling activity picked up again.”

Meanwhile, Shanghai crude oil futures for September delivery were also down 1.39% at 469.50 yuan ($73.11) per barrel on Monday at 10:40PM ET (02:40 GMT).

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