Oil futures are trading slightly lower in the early part of Monday’s Asian session, perhaps being forced to the downside on news of an expected production increase by Saudi Arabia.
On the New York Mercantile Exchange, light, sweet crude futures for April deliver are off 0.20% to USD91.77 per barrel in Asian trading Monday.
Last week, New York-traded oil futures tacked on 1.1%, the first weekly gain in three, helped by a surprisingly strong U.S. February jobs report. A report released by the Labor Department last Friday showed U.S. employers added 236,000 new jobs last month and that the unemployment rate fell to 7.7% from 7.9% in January. The U.S. is the world’s largest oil consumer.
Robust economic activity, particularly in the world’s biggest oil-consuming nations, is often viewed as a positive sign for oil demand and demand for oil byproducts such as diesel and gasoline.
On Monday, however, oil is trading lower as traders digest news of a production increase from Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries. The kingdom is expected to have pumped 9.15 million barrels per day last month, an increase of 100,000 barrels per day.
In January, Saudi Arabia’s output fell to its lowest levels in nearly two years. OPEC, the 12-nation group that accounts for about 40% of global oil production, collectively pumped 30.7 million barrels per day in February.
Some analysts expect Saudi Arabia could pump up to 9.6 billion barrels per day at some point this year year, but that would still be below the average of 9.9 million barrels per day seen last year.
Elsewhere, oil workers in the African nation of Gabon have gone on strike, which could hamper the country’s average output of 240,000 barrels per day. European oil giants Royal Dutch Shell and Total are among the largest producers in Gabon.
Meanwhile, Brent futures for May delivery fell 0.11% to USD109.86 per barrel on the ICE Futures Exchange. - investing.com