Brent oil prices fell for a fourth consecutive session on Monday after Iran insisted it would not freeze crude output, bringing back investor attention to a global glut.
Deputy Oil Minister Rokneddin Javadi said on Sunday that Iran has no plans to freeze the level of its oil production and exports, as the country tries to raise its crude exports to pre-sanctions levels.
“Under the present circumstances, the government and the Oil Ministry have not issued any policy or plan to the National Iranian Oil Company (NIOC) towards halting the increase in the production and exports of oil,” Javadi, who also heads the state-run NIOC, told Iran’s Mehr news agency.
“Currently, Iran’s crude oil exports, excluding gas condensates, have reached 2 million barrels per day (bpd),” Javadi said. “Iran’s crude oil export capacity will reach 2.2 million barrels by the middle of summer.”
Adding to signs the oil market will remain oversupplied, data showed last week the number of rigs operated by U.S. drillers held steady for the first time this year, following a near two-year slump in the rig count.
Global benchmark Brent futures were down 41 cents at $48.31 a barrel by 0851 GMT, on track for a fourth straight day of losses for the first time in a month.
U.S. crude futures traded at $47.91 a barrel, down 50 cents on Friday’s close.
“Stagnating rig counts and comments from Iranian officials show that the way up for the oil prices may come to an end now,” said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.
Javadi’s comments has rang the alarm among countries and further dampened hopes for a coordinated decision to freeze OPEC oil production at a meeting of the exporter group in Vienna on June 2.
The bearish comments outweighed concerns about unplanned oil outages globally hitting a five-year high mainly due to wildfires in Canada that have affected oil-sands production and losses in Nigeria and Libya.
Meanwhile, Goldman Sachs said in a research report on Monday that it expected shale productivity gains through 2020, which will push average breakevens for shale plays below $50 per barrel for U.S. crude.
It raised its average Brent forecast to $45 per barrel this year, from $39, while it said West Texas Intermediate would average $45 per barrel this year, up from $38 previously.