- Oil prices fell on Monday, dented by rising output in Saudi Arabia and Russia and an escalating trade disputes between the United States and other major economies.
- President Donald Trump tweeted on Saturday that Saudi Arabia's king agreed to pump more oil, "maybe up to 2,000,000 barrels," but the White House walked back the comments.
- Oil hit a 3½-year high last week on surprise supply outages in Canada and Libya and looming U.S. sanctions against Iran.
Global benchmark Brent crude fell Monday as supplies from Saudi Arabia and Russia rose while economic growth stumbled in Asia amid escalating trade disputes with the United States.
A flurry of announcements over the weekend unsettled oil markets.
U.S. President Donald Trump tweeted on Saturday that Saudi Arabia's King Salman bin Abdulaziz Al Saud had agreed to pump more oil, "maybe up to 2,000,000 barrels." The White House later walked back on the comments.
Saudi Arabia's output is up by 700,000 barrels per day (bpd) from May, a Reuters survey showed, and close to its 10.72 million bpd record from November 2016.
"There seems to be great uncertainty about how much oil will be added to the supply side of the market," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut, referring to how much Saudi Arabia's spare capacity will be able to offset shortages around the world. "How this really is going to play out seems to be up in the air."
Production from the Organization of the Petroleum Exporting Countries increased by 320,000 bpd in June, according to a Reuters survey published Monday. The 12 OPEC members with supply reduction targets increased output by 680,000 bpd compared to May.
Russian output rose to 11.06 million bpd in June from 10.97 million bpd in May, the Energy Ministry said on Monday.
U.S. production has soared 30 percent in the past two years, to 10.9 million bpd, meaning the world's three biggest oil producers now churn out almost 11 million bpd each, meeting a third of global oil demand.
Also weighing on oil demand are trade disputes between the United States and other major economies including China, the European Union, India and Canada.
"Recurring salvos in the trade war and falling asset prices raise the question of how much tariffs could damage the global economy," U.S. bank JPMorgan said.
The bank said a "medium-intensity (trade) conflict would likely reduce global economic growth by at least 0.5 percent, "before accounting for tighter financial conditions and sentiment shocks."
Despite the relief from Saudi Arabia and Russia, oil markets remain tense because of unplanned outages from Canada to Venezuela and Libya.
Looming U.S. sanctions against Iran further contribute to expected tightness. U.S. crude hit a 3½-year high last week after the Trump administration said it is pushing oil buyers to completely cut off imports from Iran by November.
Trump threatened in an interview that aired on Sunday to put sanctions on European companies that do business with Iran.
"The Trump administration's plan for Iran sanctions is now abundantly clear. They seek to push Iranian exports of crude, condensate, and oil products to zero," energy consultancy FGE said in a note.
Trump's Nov. 4 deadline to end Iranian crude purchases comes just two days before most Americans vote in midterm elections. The policy threatens to wipe out much of the gasoline price relief that U.S. drivers usually get in the fall.
U.S. crude briefly strengthened mid-session, buoyed by concerns about supply levels at the Cushing, Oklahoma delivery hub.
The premium for U.S. crude for the front month compared with the second month widened on Monday. The move indicates that the market expects supply shortages to be more severe in the short term.
"The pace of decline at drawdowns of U.S. inventories is startling," said John Kilduff, a partner at Again Capital Management in New York.
Information provider Genscape said U.S. crude inventories at Cushing had fallen in the week, traders said. Genscape said stockpiles at the hub were down 3.2 million barrels in the week to June 22, but rose slightly in the four following days to June 26.
Cushing supplies are down partially due to an outage in Canada. Production at Syncrude Canada's oil sands facility near Fort McMurray, Alberta is likely to remain offline at least through July, a Suncor Energy Inc spokeswoman reaffirmed on Tuesday.
— CNBC's Tom DiChristopher contributed to this report.