Oil prices declined yesterday, adding to heavy losses at the end of last week on the back of high drilling activity in the US and ample supplies from Opec and non-Opec nations.
Prices dropped even as Opec signalled it may widen its production caps to include Nigeria and Libya, whose output has recovered in recent months after being curtailed by years of unrest.
Brent crude futures, the international benchmark for oil prices, were at $46.21 per barrel at 0936 GMT, down 50 cents, or around one per cent, from their last close.
US crude futures were at $43.78 per barrel, down 45 cents.
“The market is in trouble and looks very vulnerable to lower numbers,” PVM brokerage said in a note.
The Organisation of the Petroleum Exporting Countries has agreed with some non-Opec members to curtail production until March 2018 but the move has failed to eliminate a global glut of crude.
Several key Opec ministers will meet non-Opec Russia on July 24 in St Petersburg, Russia, to discuss the current situation in oil markets.
Kuwait said on Sunday that Nigeria and Libya had been invited to the meeting and their production could be capped earlier than November, when Opec is scheduled to hold formal talks, according to Bloomberg.
Libya said yesterday it was ready for dialogue but added that its political, economic and humanitarian situation should be taken into account in talks on caps.
Brent prices are 17 per cent below their 2017 opening despite strong compliance by Opec with the production-cutting accord. ANZ bank said the market “continued to focus on the increasing [US] drilling activity and higher production”.
US energy firms added seven oil drilling rigs last week, marking a 24th week of increases out of the last 25 and bringing the count to 763, the most since April 2015, energy services company Baker Hughes said.
US oil production has risen more than 10 per cent since mid-2016.
“There seems little hope for [market] rebalancing... unless we see an exceptional increase in demand as reining in supply seems to be getting tougher,” said Sukrit Vijayakar, director of energy consultancy Trifecta.
However, there are some indicators the oil market might have bottomed as money managers have raised their long positions since the start of July after reducing them to a nine-month low by late June.