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Oil hits multi-week lows on fears of growing supplies

28 May 2018 23:37 (UTC +04:00)

Oil prices extended losses on Monday as Saudi Arabia and Russia said they may increase supplies while U.S. production gains showed no sign of slowing, APA reports quoting Reuters.

Brent crude futures LCOc1 stood at $75.32 a barrel at 1805 GMT, down $1.12 from the previous close. The contract touched a three-week low of $74.49 earlier in the session.

U.S. crude futures were at $66.47, down $1.41, after hitting a six-week low of $65.80.

The spread between the two contracts CL-LCO1=R reached $9.38 a barrel, its widest since March 2015.

Trading was light due to public holidays in the United States and United Kingdom.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia began withholding 1.8 million barrels per day (bpd) of supplies in 2017 to tighten the market and prop up prices that in 2016 fell to their lowest in more than a decade at less than $30 a barrel.

Prices have soared since the start of the cuts last year, with Brent breaking through $80 this month, triggering concerns that high prices could crimp economic growth and stoke inflation.

“The pace of the recent rise in oil prices has sparked a debate among investors on whether this poses downside risks to global growth,” Chetan Ahya, chief economist at U.S. bank Morgan Stanley, wrote in a weekend note.