NEW YORK Oil prices slid more than 1 percent on Monday after Iran vowed to ramp up output and as a near two-year slump in the number of rigs drilling for crude in the United States stalled.
A stockpile drawdown at the U.S. delivery hub for crude futures helped oil retrace some losses.
Crude futures fell $1 a barrel or more in early trade, the day after the Mehr news reported that Iran's Deputy Oil Minister Rokneddin Javadi said Iranian crude exports, excluding gas condensates, would reach 2.2 million barrels per day (bpd) by the middle of summer from 2 million bpd now.
An industry report on Friday showed that the number of U.S oil drilling rigs were unchanged last week, holding steady for the first time this year and signalling that the slump in the rig count since October 2014 could be ending as forecast by several analysts.
Oil pared losses after market intelligence firm Genscape reported an inventory drop of 978,862 barrels at the Cushing, Oklahoma storage hub for U.S. West Texas Intermediate (WTI) futures in the week to May 20, traders who saw the data said.
WTI's front-month was down 65 cents at $47.76 a barrel by 12:58 p.m. EDT (1758 GMT), after plumbing a session low at $47.40.
Brent's front-month was down 68 cents at $48.04, off a low of $47.58.
"Upward price momentum appears to be slowing as we feel that this late winter/spring bull move is in a very advanced stage with only about $3 to $4 a barrel remaining on the upside in referencing either WTI or Brent futures," said Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates.
Reduced U.S. production and supply outages from Venezuela to Libya and Canada have lifted oil prices about 80 percent from 12-year lows hit this winter of around $27 for Brent and $26 for WTI. Still, prices remain less than half the levels reached in mid 2014, when crude traded above $100.
Speculators banking on further price recovery raised their bullish bets on WTI futures and options last week to the highest level seen in about a year. Net long positions on Brent also rose.
"The market may also be a bit spooked at the net length" in WTI and Brent, said Scott Shelton, broker with ICAP in Durham, North Carolina.
Goldman Sachs said in a research report it expected U.S. shale crude productivity gains through 2020, which will push average breakevens for shale plays to below $50 per barrel for U.S. crude.
It raised its average Brent forecast to $45 per barrel this year, from $39, while it said West Texas Intermediate would average $45 per barrel this year, up from $38 previously.
(Additional reporting by Karolin Schaps in LONDON and Keith Wallis in SINGAPORE; Editing by David Gregorio and Marguerita Choy)
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Updated Date: May 24, 2016 00:45:06 IST