Investing.com - Oil prices slid on Monday morning in Asia as a rising rig count in the U.S. indicated higher crude production to come.
Crude Oil WTI Futures for June delivery were trading at $67.90 a barrel at 11:20PM ET (03:20 GMT), down 0.29%. Brent crude futures for June delivery, traded in London, were down 0.31% at $73.56 per barrel.
U.S. drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest level since March 2015. Increasing rigs is usually associated with increasing supply.
U.S. crude production has also soared more than 25% since mid-2016 to a record 10.59 million barrels per day (bpd). Only Russia currently produces more, at around 11 million bpd, which the U.S. is expected to surpass by 2019.
Despite the small drop, oil prices held near more than three-year highs.
Concerns that the U.S. will re-impose sanctions against Iran continue to prop up prices. U.S. President Donald Trump has until May 12 to decide whether to restore sanctions that were lifted after an agreement over Iran’s disputed nuclear program.
Sanctions on the nation would likely result in a reduction of its oil exports, and as Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), this could tighten global oil supplies.
In addition, Venezuelan oil output has tumbled 40% in two years due to political and economic turmoil, and the European Union said earlier this month it could impose further sanctions on Venezuela, OPEC’s largest producer in Latin America, if it believes democracy is being undermined there.
Geopolitical uncertainties remain the most significant driver in oil price sentiment, while a backdrop of OPEC-led supply cuts and strong global demand continues to support markets.
Meanwhile, Shanghai Crude Oil WTI Futures for September delivery were flat at 444.20 yuan ($69.80) per barrel at 11:20PM ET (03:20 GMT) on Monday.