Oil fell more than 2 percent on Monday as signs of growing U.S. production outweighed optimism that many other producers, including Russia, were sticking to a deal to cut supplies in a bid to bolster the market.
Brent crude futures LCOc1 were down $1.30, or 2.3 percent, at $55.80 a barrel at 1414 GMT (9:14 a.m. ET), after touching a intra-day low of $55.69. U.S. crude futures CLc1 were trading at $52.73 per barrel, down $1.26, or 2.3 percent, compared with a session low of $52.64.
“We see the optimism surrounding OPEC and non-OPEC production cuts being counterbalanced by fears of higher U.S. crude production as the higher rig count of last Friday still weighs,” said Hans van Cleef, senior energy economist at ABN Amro.
Last week, U.S. energy companies added oil rigs for a 10th week in a row to 529, Baker Hughes data showed, extending a recovery in activity into an eighth month.
Analysts at Barclays said they expected the U.S. rig count to rise to 850-875 by the end of the year.
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