Investing.com - Oil prices extended overnight losses in North American trade on Monday, with the U.S. benchmark falling to a more than one-week low amid indications of increased domestic drilling activity.
Crude oil for July delivery on the New York Mercantile Exchange slumped to an intraday low of $48.16 a barrel, the weakest level June 2. It last stood at $48.34 by 13:35GMT, or 9:35AM ET, down 73 cents, or 1.49%.
On Friday, New York-traded oil prices sank $1.49, or 2.95%, after data showed the U.S oil rig count rose the second straight week last week, underlining concerns over growing supplies.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. increased by three last week to 328.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
U.S. crude futures are up nearly 85% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment. However, with prices now at levels that make drilling economical for some firms, the rig count might start rising soon and the decline in U.S. production may slow.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery dipped 78 cents, or 1.54%, to trade at $49.76 a barrel after hitting a daily low of $49.61, a level not seen since June 3.
London-traded Brent slumped $1.41, or 2.71%, on Friday. Brent futures prices are up by roughly 90% since briefly dropping below $30 a barrel in mid-February as unplanned supply disruptions in Africa eased concerns over a global glut
The Organization of the Petroleum Exporting Countries kept forecasts for global oil supply and demand unchanged in its monthly market report published Monday.
Global oil demand will increase by 1.2 million barrels a day this year to 94.18 million a day, holding steady from a month earlier.
Non-OPEC production will fall by 740,000 barrels a day from 2015 to 56.4 million barrels a day this year, due to slowing output in Canada and Brazil.
Meanwhile, OPEC’s 13 members pumped 32.36 million barrels a day in May, 100,000 barrels a day lower than a month earlier, mainly due to production outages in Nigeria and Venezuela.
The International Energy Agency will release its monthly outlook report on Tuesday.