Crude prices remain lower amid glut worries

LONDON, August 21, 2017 – Crude oil prices remained lower on Monday, as concerns over U.S. oil production levels and a global supply glut persisted.

The U.S. West Texas Intermediate crude September contract was at $48.55 a barrel by 9:00 a.m. ET (01:00 p.m. GMT), down 13 cents, or around 0.27%.

Elsewhere, Brent oil for October delivery on the ICE Futures Exchange in London lost 25 cents or about 0.51% to $52.45 a barrel, just off Friday’s one-week high of $52.96.

Crude prices remained under pressure after U.S. government data this week revealed an increase in domestic production to the highest level in over two years.

Oil prices weakened after data from the U.S. Energy Information Administration showed last week that total domestic crude production edged up by 79,000 barrels a day to 9.5 million barrels, its highest level since July 2015.

That comes despite data showing that U.S. energy firms cut rigs drilling for new oil for a second week in three. Drillers cut five oil rigs in the week to Aug. 18, bringing the total count down to 763, oilfield services firm Baker Hughes said Friday.

The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.

The commodity briefly rallied on Friday following reports a unit at Exxon (NYSE:NYSE:XOM) Mobil’s Baytown, Texas, refinery shut down. The 584,000 barrel-a-day plant is the second-largest refinery in the U.S.

Elsewhere on Nymex, gasoline futures for September slid 0.41% to $1.601 a gallon, while September heating oil declined 0.94%, to $1.605 a gallon.

Natural gas futures for September delivery dropped by 0.2 cent, or roughly 0.8%, to $2.873 per million British thermal units.

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