[NEW YORK] Oil prices slid early on Monday as Iran vowed to ramp up output and rig reductions paused in the United States, then crude futures pared losses on data showing a stockpile drawdown at the US delivery hub.
Oil fell US$1 a barrel or more in early trade, the day after the Mehr news reported that Iran's Deputy Oil Minister Rokneddin Javadi said the country's crude exports, excluding gas condensates, would reach 2.2 million barrels per day (bpd) by the middle of summer from 2 million bpd now.
On Friday, an industry report showed the number of oil rigs operated by US drillers held steady for the first time this year, following a near two-year slump in the count.
Oil pared losses after a report showed a stockpile drawdown at the Cushing, Oklahoma delivery hub for US West Texas Intermediate (WTI) futures. Market intelligence firm Genscape reported an inventory drop of 978,862 barrels in Cushing during the week to May 20, traders who saw the data said.
WTI's front-month was down 30 cents at US$48.11 a barrel by 11:07 am EDT (1507 GMT), after plumbing a session low at US$47.40.
Brent's front-month was down 52 cents at US$48.20, off the day's bottom of US$47.58.
"Upward price momentum appears to be slowing as we feel that this late winter/spring bull move is in a very advanced stage with only about US$3 to US$4 a barrel remaining on the upside in referencing either WTI or Brent futures," said Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates.
Reduced US production and supply outages from Venezuela to Libya and Canada have lifted oil prices about 80 per cent from 12-year lows hit this winter of around US$27 for Brent and US$26 for WTI. Still, prices remain less than half the levels reached in mid 2014, when crude traded above US$100.
Goldman Sachs said in a research report it expected US shale crude productivity gains through 2020, which will push average breakevens for shale plays to below US$50 per barrel for US crude.
It raised its average Brent forecast to US$45 per barrel this year, from US$39, while it said West Texas Intermediate would average US$45 per barrel this year, up from US$38 previously.