LONDON — Oil prices fell Monday on persistent concerns about the global supply glut, analysts said. US benchmark West Texas Intermediate for delivery in September dropped 68 cents to $46.44 a barrel.
Brent North Sea crude for September slid $1.10 to stand at $51.11 a barrel in London afternoon deals.
Prices were facing downward pressure following "signs that top producers in the Middle East were continuing to pump at record levels despite a growing global glut", said Singapore's United Overseas Bank in a market commentary. Oil prices had already dived on Friday after Abdullah El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said the group would not cut output in response to lower prices.
Analysts said the statement shows the 12-nation OPEC, led by kingpin Saudi Arabia, is determined to defend its market share as it fends off competition from US shale oil.
At its most recent meeting in Vienna in June, OPEC kept its output levels of around 30 million barrels a day despite the supply glut that has depressed oil prices.
Crude futures are under pressure also owing to the strength of the US currency, which makes dollar-priced oil more expensive to holders of weaker units, dampening demand.
The dollar has picked up steam on expectations the Federal Reserve will raise US interest rates later this year.
Early in the day, the price of Brent crude dipped as much as 3.4 percent in afternoon trading to $50.43 per barrel, its lowest since the January this year, as the commodities crisis continued to weigh on the market.
The news drove the ruble down 1.67 percent against the dollar, to $0.01593. Russia's economy is heavily dependent on oil.
Shares in UK-listed oil producers also fell, with BP shares dipping 1.89 per cent to 387.98p, while Shell shares fell 1.05 per cent to 1,841p. On Friday, former FTSE 250-listed Afren became the first major casualty of the rout in oil prices when it called in the administrators.
US benchmark West Texas Intermediate (WTI) ended July on its biggest monthly fall since the 2008 financial crisis during July. Today it was down 2.97 percent at $47.12 per barrel.
Meanwhile, a closely-watched survey by Baker Hughes published on Friday evening showed US drillers added five oil rigs last week, which was expected to mute prices even further.
The news came as analysts at Bank of America Merrill Lynch warned the price of West Texas Intermediate (WTI) could rise above Brent crude by spring next year.
"Higher Middle East output combined with declining drilling activity in North America could reverse WTI-Brent dynamics in 2016," they said.
"With shale output dropping, US refiners may have to import light crude again to keep up with robust gasoline demand growth. Consequently, WTI may have to temporarily trade above Brent next spring to attract foreign light sweet crude into the US." — SG/Agencies
