Russia’s Finance Minister Anton Siluanov said over the weekend that Russia and OPEC may decide to boost production to fight for market share with the United States, but this would push oil as low as $40 per barrel.
Brent crude oil futures stood at $71 a barrel at 0431, down 18 cents, or 0.25 percent, from their last close. Brent ended down 0.5 percent on Monday. U.S. West Texas Intermediate (WTI) crude futures were at $63.32 per barrel, down 8 cents, or 0.13 percent, from their previous settlement.
“There is a growing concern that Russia will not agree on extending production cuts and we could see them officially abandon it in the coming months,” Edward Moya, senior market analyst at OANDA, told Reuters.
The Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, will meet in June to decide whether to continue withholding supply. That comes after they previously agreed to crimp output by 1.2 million barrels per day (bpd) from Jan. 1 for six months.
Surging shale oil output in the United States has also helped rein in benchmark crude prices.
“Rising U.S. shale output has … imposed headwinds for oil prices,” said Benjamin Lu, commodities analyst at Singapore-based brokerage Phillip Futures.
U.S. crude oil output from seven major shale formations is expected to rise by about 80,000 bpd in May to a record 8.46 million bpd, the U.S. Energy Information Administration said in a report.
However, losses in oil prices were checked by tighter supplies from Iran and Venezuela amid signs the United States will further toughen sanctions on those two OPEC producers, and on the threat that renewed fighting could wipe out crude production in Libya.