Crude oil prices fell Monday after Russia’s finance minister said Russia and Opec+ may boost production to fight the U.S. for market share, Kallanish Energy reports.
Losses were limited by global supply tightening, as output has fallen in Iran and Venezuela due to U.S. sanctions, which could be tightened. Renewed fighting also threatened to sharply cut crude production in Libya.
U.S. West Texas Intermediate crude futures settled 49 cents lower Monday, at $63.33 per barrel, dropping nearly 1%. WTI touched a five-month high at $64.79/Bbl last week.
Brent crude oil futures fell 37 cents, to $71.18/Bbl, having hit their highest price since Nov. 12 last Friday, at $71.87/Bbl.
Oil prices have been lifted by more than 30% this year, primarily due to a deal to cut production by 1.2 million barrels per day (Mmbpd) by Opec+, a group which includes most Opec members, plus a number of non-Opec producers led by Russia.
The group will meet in June to decide whether to continue withholding supply past mid-year.
Russian finance minister Anton Siluanov said over last weekend his country and Opec may decide to boost production to fight for market share with the U.S.
“There is a dilemma. What should we do with Opec: should we lose the market, which is being occupied by the Americans, or quit the deal?” Anton Siluanov, speaking in Washington, said, Russian news service Tass reported.
”(If the deal is abandoned) the oil prices will go down, then new investments will shrink, American output will be lower, because the production cost for shale oil is higher than for traditional output.”
While the minister said he didn’t know whether Opec countries would raise production. Saudi Arabia is believed to want to keep cutting.
Oil prices have faced pressure from a surge in U.S. crude output, which is at a weekly record of 12.2 Mmbpd.
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