Oil prices traded lower on Tuesday, heading for a sharp monthly decline, as concerns over escalating supply returned to the forefront.
New York-traded West Texas Intermediate crude futures slumped $1.52, or 2.17%, to $68.61 a barrel by 10:41 AM ET (14:41 GMT).
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded down $1.08, or 1.43%, to $74.47.
U.S. crude was on track for monthly losses of 7.4%, while Brent declined 6.1% in July.
A Reuters survey showed that OPEC hiked production by 70,000 barrels per day to 32.64 million bpd, a 2018 high, Reuters reported. Further supply increases could offset production outages and pressure prices, it added.
On June 22-23, OPEC, Russia and other non-members agreed to return to 100% compliance with oil output cuts that began in January 2017, after months of underproduction elsewhere had pushed adherence above 160%.
Even though output continued to decline in Iran, Libya and Venezuela, the survey suggested that compliance had only fallen to 111% in July, suggesting more room for increasing production from the likes of Saudi Arabia or OPEC’s non-member ally Russia.
In another worrying sign, the U.S. rig count, an early indicator of future output, rose by 3 to 861 last week, according to oilfield services firm Baker Hughes.
That was the first rig count rise in three weeks, pointing to signs of U.S. output growth.
In other energy trading, gasoline futures fell 1.84% $2.0736 a gallon by 10:44 AM ET (14:44 GMT), while Heating Oil lost 1.53% to $2.1431 a gallon.
Lastly, natural gas futures gained 0.82% to $2.820 per million British thermal units.