Brent crude held losses after a third weekly decline as investors weighed the prospect of increased Iranian supplies against a drop in U.S. drilling rigs.
Futures were little changed in London after falling 2.8% last week. The number of active machines targeting oil in the United States shrank by seven to 638, Baker Hughes Inc. said on its website July 17. Speculators cut bullish bets on West Texas Intermediate crude to the lowest level since March as Iran’s nuclear deal with world powers threatens to prolong a global supply glut.
Brent’s recovery from a six-year low in January has faltered as leading members of the Organization of Petroleum Exporting Countries pump at record levels to defend market share. Iran may restore production halted by sanctions faster than anyone anticipates if the history of previous shutdowns is any guide, according to data compiled by Bloomberg News.
“There is more production than the market needs with the risk of it potentially being increased with Iran,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “Oil has paused but is still drifting lower.”
Brent for September settlement was at $57.01 a barrel on the London-based ICE Futures Europe exchange, down 9 cents, at 11:32 a.m. Sydney time. The European benchmark crude traded at a premium of $5.86 to WTI for September.
WTI for August delivery, which expires July 21, slid 12 cents to $50.77 a barrel in electronic trading on the New York Mercantile Exchange. The more-active September contract was down 10 cents at $51.11. Total volume was about 5% below the 100-day average.
