Oil fell from the highest settlement in more than three months as Iran reiterated plans to expand production amid a global glut.
Futures decreased as much as 0.9 percent in New York after advancing 1.7 percent Friday. Brent crude was little changed. Iran plans to boost output to 4 million barrels a day before it will consider joining other suppliers in seeking to rebalance the market, Oil Minister Bijan Namdar Zanganeh said, according to the Iranian Students News Agency. Active U.S. rigs dropped to the lowest level since December 2009, data from Baker Hughes Inc. shows.
Oil has recouped its losses this year after slumping to a 12-year low last month amid speculation stronger demand and falling U.S. production will ease a worldwide surplus. Prices may have passed their lowest point as shrinking supplies outside OPEC and disruptions inside the group erode the oversupply, the International Energy Agency said Friday.
“There is a downside risk to prices if Iranian output picks up a lot quicker than markets are expecting,” Angus Nicholson, an analyst at IG Ltd. in Melbourne, said by phone. “Oil has had some pretty good upward momentum, but there is still a huge amount of inventory that needs to be cleared.”
West Texas Intermediate for April delivery fell as much as 33 cents to $38.17 a barrel on the New York Mercantile Exchange and was at $38.36 at 8:56 a.m. Hong Kong time. The contract climbed 66 cents to $38.50 on Friday, the highest close since Dec. 4. Total volume traded was about 53 percent below the 100-day average. Prices rose 7.2 percent last week.
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Brent for May settlement was 3 cents higher at $40.42 a barrel on the London-based ICE Futures Europe exchange. The contract rose 0.9 percent to $40.39 on Friday, capping a 4.3 percent increase for the week. The global benchmark crude was at a premium of 47 cents to WTI for May.
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