Oil slides further on rising US output

Crude oil prices continued to decline on Monday, as rising U.S. production offset optimism surrounding global supply cut efforts to drain the market of excess supplies.

The U.S. West Texas Intermediate crude March contract was down 78 cents or about 1.19% at $64.67 a barrel by 04:00 a.m. ET (08:00 GMT).

Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London lost 91 cents or about 1.33% to $67.67 a barrel, the lowest since January 8.

Oil prices dropped after General Electric (NYSE:GE)’s Baker Hughes energy services firm reported on Friday that the number of oil drilling rigs climbed for a second week in a row. It rose by six to 765 last week, implying that further gains in domestic production are ahead.

Domestic U.S. output has increased by almost 20% from the most recent low in mid-2016 and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices.

U.S. crude oil production, driven by shale extraction, hit 9.91 million barrels per day last week, according to government data, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.

Oil prices have risen almost 55% from around $43 a barrel in June, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

Elsewhere, gasoline futures declined 0.81% to $1.852 a gallon, while natural gas futures lost 2.60% to $2.772 per million British thermal units.