Oil prices tumbled in Monday's trading session, as rising USA drilling activity and stable supply from OPEC countries, despite attempts for production cuts, squeezed the already inflated markets.
The Organization of the Petroleum Exporting Countries (OPEC) is curbing its output by about 1.2 million barrels per day (bpd) from January 1, the group's first reduction in eight years. 100% delivery of the quota will be achieved by the end of April because of process specificities of oil production in Russia, Energy Minister Alexander Novak said earlier.
"We have already seen how worries of a border-adjustment tax moved the crude forward curve in the first few weeks following [President Donald] Trump's inauguration", said Troy Vincent, oil analyst at ClipperData. West Texas Intermediate, a USA petroleum price indicator, slipped to $48.22 per barrel Monday, ending what appeared to be the start of a recovery from a drop to below $48 from over $53 earlier in the month.
The average daily production in March was 1.51 mln tonnes versus 1.532 mln tonnes last October [a factor of 7.33 was used for conversion into barrels - TASS].
Despite thin Asian trading that resulted from a Japanese holiday, the dollar edged down against its primary trading partners, with the dollar index starting the week at 100.140.DXY, a 0.16 percent decline.More news: Drake tops 10 billion Spotify streams, drops More Life mixtape
The May contract of West Texas Intermediate crude oil futures, the United States benchmark of oil prices, fell 1.6% to $48.54 per barrel.
The total rig count is still 978 from its peak before the impact of the oil crash hit drillers, but that gap continued to shrink last week.
United States oil output has risen to over 9.1 million bpd from below 8.5 million bpd in June a year ago.
The price-gouging effort by the collection of oil-rich nations was meant to at least somewhat correct for two-and-a-half years of devastatingly low prices, which at times crippled the economies of Russia, Saudi Arabia and Nigeria, among others.