Oil Drops With Higher Output

Oil fell more than $1 a barrel to below $56 on Monday as a rise in U.S. drilling and higher OPEC output put the brakes on a rally that helped prices to register their biggest third-quarter gain in 13 years.

U.S. energy companies added oil rigs for the first week in seven and Iraq announced its exports rose slightly in September while OPEC overall boosted output, a Reuters survey showed.

Brent crude, the global benchmark, was down $1.02 at $55.77 a barrel at 1310 GMT. It notched a third-quarter gain of about 20 percent, the biggest third-quarter increase since 2004 and traded as high as $59.49 last week.

“I think it’s going to be a struggle to move above $60 Brent,” said Olivier Jakob, oil analyst at Petromatrix.

U.S. crude was down $1.22 at $50.45. The U.S. benchmark posted its strongest quarterly gain since the second quarter of 2016.

The rally was driven by mounting signs that a three-year supply glut is easing, helped by a production cut deal among global producers led by the Organization of the Petroleum Exporting Countries.

via Reuters

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