Oil prices steady near multi-month lows on OPEC’s record-high production, increased US rig count

TOKYO — Oil prices were little changed on Monday near multimonth lows, dragged down by worries about oversupply as the Organization of the Petroleum Exporting Countries (OPEC) saw record output last month and as the US rig count rose again.

London Brent crude for January delivery was trading up 4 cents at $44.79 a barrel by 0630 GMT, after settling down $ 1.09 on Friday.

The benchmark on Friday hit its lowest since Aug. 11 at $44.19 per barrel.

NYMEX crude for December delivery was down 4 cents at $43.37 a barrel. The contract closed down $1.25 on Friday after dropping as low as $43.03, its weakest since Sept. 20.

The dollar rose to a ninemonth high against other currencies on Monday, pressuring oil prices.

“Overall the market is seen heading lower because of a strong dollar,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

OPEC said on Friday that its output rose to a record 33.64 million barrels per day ( bpd) in October, up 240,000 bpd from the previous month.

OPEC plans to cut or freeze output, but investors are skeptical such a deal will be reached during the cartel’s Nov. 30 meeting and are concerned that whatever agreement reached would not be effective.

However, OPEC’s plans, coupled with Donald Trump’s victory in the presidential election, have spurred production activity in the US shale patch, as cautiously confident shale producers redeploy cash, rigs and workers. BMI Research said in a note that the most likely scenario at the OPEC meeting will be no deal, as the victory of Republican Trump — a strong advocate of US energy independence — has altered its expectations.

Still, Saudi Energy Minister Khalid al- Falih has said it was imperative for OPEC members to reach a consensus on activating a deal made in September in Algiers to cut oil production, according to Algeria’s state news agency on Sunday.

Iran opened three oilfields with a total production of more than 220,000 bpd on Sunday, as the country continues to ramp up its production.

Weekly Baker Hughes data showed that active US drilling rigs rose by two, an increase in 21 out of the last 24 weeks.

China’s daily crude oil production in October fell to the lowest in more than seven years, while crude oil refinery throughput in October rose to the highest since at least 2011, data from the statistics bureau showed. —