Oil hits multi-week lows on fears of growing supplies
By Ahmad Ghaddar LONDON (Reuters) - Oil prices extended losses on Monday as Saudi Arabia and Russia said they may increase supplies while U.S.
By Ahmad Ghaddar
LONDON (Reuters) - Oil prices extended losses on Monday as Saudi Arabia and Russia said they may increase supplies while U.S. production gains showed no sign of slowing.
Brent crude futures stood at $75.32 a barrel at 1805 GMT, down $1.12 from the previous close. The contract touched a three-week low of $74.49 earlier in the session.
U.S. crude futures were at $66.47, down $1.41, after hitting a six-week low of $65.80.
The spread between the two contracts reached $9.38 a barrel, its widest since March 2015.
Trading was light due to public holidays in the United States and United Kingdom.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia began withholding 1.8 million barrels per day (bpd) of supplies in 2017 to tighten the market and prop up prices that in 2016 fell to their lowest in more than a decade at less than $30 a barrel.
Prices have soared since the start of the cuts last year, with Brent breaking through $80 this month, triggering concerns that high prices could crimp economic growth and stoke inflation.
"The pace of the recent rise in oil prices has sparked a debate among investors on whether this poses downside risks to global growth," Chetan Ahya, chief economist at U.S. bank Morgan Stanley, wrote in a weekend note.
To address potential supply shortfalls Saudi Arabia, the de facto leader of OPEC, and top producer Russia have been in talks about easing the cuts and raising oil production by 1 million bpd, sources said last week.
Russian Energy Minister Alexander Novak said on Saturday that a return to October 2016 production levels, the baseline for the current supply pact, was one option for easing curbs.
"Given that our crude balance is short some 825,000 bpd over (the second half of the year), a gradual increase of about 1 million bpd would probably limit stock draws to quite some extent," Vienna-based consultancy JBC Energy said.
Meanwhile, surging U.S. crude production showed no sign of abating as drillers continued to expand their search for new oilfields to exploit.
U.S. energy companies added 15 rigs looking for new oil in the week ending May 25, bringing the rig count to 859, its highest since 2015, in a strong indication that American crude production will continue to rise.
U.S. crude output has already surged by more than 27 percent in the past two years, to 10.73 million bpd, ever closer to Russia's 11 million bpd.
(Reporting by Rod Nickel in Winnipeg, Manitoba and Ahmad Ghaddar in London; Additional reporting by Henning Gloystein in Singapore; Editing by Tom Brown and Rosalba O'Brien)
This story has not been edited by Firstpost staff and is generated by auto-feed.
U.S. home sales fall as tight supply boosts prices | Reuters
France, Germany to agree to NATO role against Islamic State - sources | Reuters
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
China's Xi says navy should become world class | Reuters
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.