Oil resumed its decline as U.S. drilling increased and Iran said OPEC production may rise to a record after sanctions on the country are lifted, FuelFix.com reports.
Futures slid as much as 2% in New York to trade near the six-year intraday low reached Aug. 14. The Organization of Petroleum Exporting Countries may boost output to 33 million barrels a day after Iran’s international export restrictions are removed, according to the nation’s OPEC representative. The number of rigs seeking oil in the U.S. rose by two to 672, the most since May, Baker Hughes Inc. data show.
Oil has slumped more than 30% from this year’s peak in June on speculation the global surplus will be prolonged. While U.S. crude stockpiles fell for a third week through Aug. 7, supplies remain more than 90 million barrels above the five-year average for this time of year.
“One overall big fundamental thing is the market is still heavily oversupplied, with OPEC still flooding the market,” Andy Sommer, an analyst at Axpo Trading AG in Dietikon, Switzerland, told Bloomberg.
Meanwhile, drillers in the U.S., the world’s biggest oil consumer, have added rigs to fields for the fourth straight week, Baker Hughes said on its website on Friday. While the number of active machines has climbed to 672, the total count is still down almost 60% since December.
The U.S. agreed to allow some crude to flow to Mexico in the latest step toward easing a 40-year ban on most domestic exports.
