Oil prices fell to a low of three months Monday despite efforts by OPEC to curb output of crude. The prices were pulled down in part due to U.S. drillers adding more rigs.
Brent crude was off 11 cents equal to 0.21% to $51.26 a barrel in London early Monday, which was its lowest since November 30. In its previous session, oil was off 1.6%.
West Texas Intermediate in the U.S. was down 19 cents equal to 0.39% to a barrel price of $48.30 which was also its lowest since November 30.
During the current streak, there has been a drop of 8.5% which is the worst performance for crude since June of 2016.
If WTI is also down for the day it will mark a sixth straight day of declines during which the price has fallen by 9.3%.
The slump in oil prices has taken place due to more U.S. rigs going back online to look for oil and as inventories of crude across the U.S., the largest oil consumer in the world, have surged to new record highs.
Drillers in the U.S. added oil rigs for the eighth straight week, said Baker Hughes Friday, as U.S. energy companies ratcheted up their spending to take advantage of the recovery earlier of the price of crude since the OPEC nations agreed to lower output.
OPEC as well as other major producers of oil including Russia entered into an agreement in late 2016 to lower production by close to 1.8 million barrels a day during the first six months of 2017.
Overshadowing the cuts, crude inventories in the U.S. surged a week ago by over 8.2 million barrels.
One industry analyst said the market was still trying to digest such a large increase in oil inventories, and oil prices were likely going to be under pressure all of Monday.
One market strategist in London said that markets this week would be dominated by the expectations that the Federal Reserve in the U.S. would make an interest rate hike after its two-day meeting.
An increase in rates in the U.S. would likely help the dollar, making oil that is dollar dominated more expensive for countries importing it.
