Oil prices are falling on Monday, because the monthly increase in output in the Organization of Petroleum Exporting Countries offset the drop in US production and the recent weakening of the dollar, which were main propeller for recent growth of the prices.
WTI crude for delivery in June traded on the New York Mercantile Exchange fell 39 cents or 0.81% to $45.55/barrel.
Brent crude, traded at ICE exchange in London fell 1.27%, to $46.79.
OPEC oil production in April rose to record highs in recent history a Reuters poll showed on Friday, as the increase in production in Iran and Iraq offset strike in Kuwait and other delays in deliveries.
According to the survey the April OPEC production rose to 32.64 million barrels/day from 32.47 million barrels/day the previous month, reinforcing concerns about oversupply in the global energy markets.
Trading volumes remained fragile due to the celebration of May Day in many countries.
Oil has risen more than 75% from 12-year lows in January amid signs that low prices are beginning to resist the growth of output due to high production costs, resulting in ease of the glut.
On Sunday, the head of the International Energy Agency, Fatih Birol said that oil prices may have bottomed out, provided that the global economy will keep the current momentum of development.
US Energy Secretary Ernest Moniz said Monday that it expects to restore the balance of supply and demand of oil in the world market for about a year.
This year, oil production in the US could drop by 600,000 barrels per day on an annual basis, as producers respond to lower prices, said Moniz.
European stock indexes show mixed performance as the markets are still under the influence of the Bank of Japan’s decision to leave its monetary policy unchanged, while today investors awaited speech European Central Bank President Mario Draghi.
During European morning trade, EURO STOXX 50 fell 0.25%, France’s CAC 40 rose 0.18%, while Germany’s DAX 30 added 0.44%.
Markets still fluctuate after last Thursday, the Bank of Japan decided to leave its monetary policy unchanged, contrary to market expectations, preparing for additional mitigation.
The decision was made the next day after the Federal Reserve on Wednesday left interest rates unchanged near zero and almost did not give hints on future hikes.