Crude oil prices fell in early Asian trading on Monday as markets were expected to be increasingly oversupplied following OPEC’s decision last Friday to keep its production targets unchanged.
The Organization of the Petroleum Exporting Countries (OPEC) agreed last Friday to stick by its policy of unconstrained output, which currently stands above 30 million barrels per day, contributing to a market that is already seeing millions of barrels of crude stored in tankers without a buyer.
OPEC ministers also said that the group may exceed the 30 million bpd target, especially should Libya’s, Iraq’s or Iran’s production and exports increase.
“In keeping its production targets on hold, the secretariat is signaling that it continues to stand by its November 2014 decision to let market forces determine prices,” Barclays said in a note following OPEC’s meeting.
“For now, the group will wait for lower prices to curb non-OPEC supply growth to stimulate global demand,” it added.
* Front-month U.S. crude futures were at $58.67 per barrel at 0015 GMT on Monday, down 46 cents from their last settlement.
* Brent futures dropped 43 cents to $62.88 a barrel.
* The dollar rose over one percent against a basket of currencies last Friday and was also up slightly on Monday , ending a run of session in June that had pulled the greenback down over 3 percent.
* The following data is expected on Monday (GMT):
China Trade data May (no time specified)
0600 Germany Industrial output Apr
0600 Germany Trade data Apr
0830 Euro zone Sentix index Jun
1400 U.S. Employment trends Jun