Oil prices fell towards $62 a barrel on Monday on a strong dollar and as Saudi Arabian Oil Minister Ali al-Naimi said production would stay around 10 million barrels per day (bpd) in April.
Brent crude LCOc1 was trading down $1.20 at $62.25 by 1147 GMT, down from an intraday peak of $64.34. U.S. crude for May delivery CLc1 was down 74 cents at $55 a barrel, down from an early high of $56.65.
The dollar was up 0.47 percent against a basket of currencies .DXY, denting the price of crude oil. A strong greenback makes dollar-traded commodities like crude oil less attractive for holders of other currencies.
Production in the world’s biggest crude exporter would stay near record peaks around 10 million bpd in April, Saudi Arabian Oil Minister Ali al-Naimi told Reuters on Monday in Seoul, where he is due to attend a board meeting of the state oil firm Saudi Aramco [SDABO.UL].
“I have said many times we will always be happy to supply to our customers with what they want. Now they want 10 million,” he said.
Naimi earlier this month said Saudi Arabia produced 10.3 million bpd of crude in March, eclipsing a previous record of 10.2 million bpd, in what is seen as a move to defend market share against non-OPEC competition, including the United States.
U.S. oil drilling rigs fell for a record 19th straight week to the lowest since 2010, data from oil services firm Baker Hughes showed, which has helped lift prices from six-year lows reached in January.
Since the beginning of April, oil prices have risen around 17 percent, pushed up by reports of a possible dip in U.S. output, but Morgan Stanley warned that Saudi production could be more important than developments in the United States.
“We worry about the market’s fixation on the U.S. … OPEC production may be more important as production increased 1 million barrels per day month-on-month in March. Saudi Arabia alone added the equivalent of half of Bakken (the largest U.S. shale oilfield) production in a matter of months – far beyond any U.S. slowdown,” the bank said in a note.
Hedge funds and other money managers raised their net long positions to a record 263,578 contracts in the week to April 14, according to data from InterContinental Exchange (ICE) (ICE.N) released on Monday