Oil prices edged lower Monday as data showed Saudi Arabian exports fell to the lowest in five months despite record output, while a resurgence in U.S. drilling activity seen earlier this month seemed to fizzle out.
Both international and U.S. crude futures posted their third consecutive weekly losses last week on expectations of increased exports from Iran following a deal to ease sanctions against the OPEC producer.
U.S. crude futures for August, also known as West Texas Intermediate (WTI), closed down 1.45 percent, at $50.15 a barrel—the lowest since April 2. WTI fell more than 3 percent last week and more than 14 percent in July. The August contract expires on Tuesday.
Brent crude for September was 45 cents lower at $56.65 a barrel. The benchmark had fallen nearly 3 percent last week and more than 10 percent for the month.
Saudi Arabia's crude oil exports fell in May to their lowest since December, with official data showing daily shipments stood at 6.935 million barrels a day (bpd) compared to 7.737 million bpd in April.
The decline came despite record high output of over 10 million bpd as the Kingdom—traditionally the world's biggest exporter of crude—transforms into one of the largest oil refining centers.
In the United States, drillers cut seven oil rigs last week, according to a closely watched report by Baker Hughes.
Should WTI get back to a level seen last month around $60 a barrel, "U.S. producers will ramp up activity given improved returns with costs down nearly 30 percent and producers increasingly comfortable (with the current economics)," analysts at Goldman Sachs said in a note to clients.
Schlumberger said it is betting on an uptick in demand in coming quarters for oilfield services in North America, a market that has been battered by the steep drop in oil prices.
Current drilling activity indicates U.S. production will grow at just over 100,000 barrels per day in 2016, "which we view as likely given the observed rise in well backlog," Goldman Sachs said.
Money managers cut their net long U.S. crude futures and options positions in the week to July 14, the U.S. Commodity Futures Trading Commission said on Friday.
Russian Energy Minister Alexander Novak said he will meet OPEC Secretary-General Abdullah al-Badri in Moscow on July 30 to discuss oil markets and the Iran situation.
Britain's North Sea Buzzard oilfield began ramping up on Friday after an outage on Wednesday. The outage was supportive to Brent as oil from the field contributes to the calculation of the futures price.