Oil prices eased on Monday as signs of a strong recovery in U.S. drilling largely overshadowed news that OPEC and non-OPEC producers were on track to meet output reduction goals.
Ministers representing members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers said at a meeting on Sunday that they had taken 1.5 million barrels per day out of the market. The producers have agreed to reduce supplies by almost 1.8 million barrels per day in the first half of this year.
"Despite comments over the weekend at the OPEC compliance meeting that cuts in OPEC/non-OPEC production were ahead of schedule, a sharp rise in U.S. rig counts and talk of large increases in capital spending seem to be souring the bullish mood," said Phil Flynn, analyst at Chicago-based brokerage Price Futures Group.
U.S. drillers added the most rigs in nearly four years last week, data from energy services company Baker Hughes showed on Friday, extending an eight-month drilling recovery.