Oil prices fell on Monday, extending the Friday decline that halted a weeks-long rally, after President Donald Trump demanded that producer club OPEC raise output to soften the impact of U.S. sanctions against Iran, Reuters reported.
Brent crude futures were down 8 cents, or 0.11 percent, at $72.07 a barrel. U.S. West Texas Intermediate (WTI) crude futures lost 9 cents, or 0.14 percent, to $63.21.
Both benchmarks fell by about 3 percent in the previous session.
Trump on Friday again urged OPEC and top oil exporter Saudi Arabia to lower oil prices.
“I called up OPEC, I said you’ve got to bring (gasoline prices) down,” Trump told reporters on Friday.
“Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement,” the president later tweeted.
Trump’s remarks triggered a sell-off, putting at least a temporary ceiling on a 40 percent price rally since the start of the year.
The rally had gained momentum in April after Trump tightened sanctions against Iran by ending all exemptions previously granted to that major buyers.
U.S. sanctions on Venezuela are also working to tighten global supply as fighting in Libya threatens to curb output there as well.
“We are dealing with a market that’s not actually short of supply but is short due to politically-motivated action, and we know how quickly that can be turned around if necessary,” Saxo Bank analyst Ole Hansen told Reuters.
“Being a bear in the market is a very lonely place now.”
Traders said the market was shifting focus to the voluntary supply cuts led by OPEC, the de facto head of which is the world’s top oil exporter, Saudi Arabia.
“We are of the view that Saudi Arabia will increase output as soon as May, something they were likely to do anyway in the lead up to summer,” ING bank said.
It added that Saudi could increase its output and “still be in compliance with the OPEC+ deal for the month of May.”
Hedge fund managers added even more bullish long positions in crude oil and refined fuels last week, a ninth consecutive weekly increase.
“We believe that the (fall in prices) is probably due to the situation on the futures market being currently overbought,” Commerzbank wrote in a note.
“Consequently, even small levels of uncertainty can spark a more marked price response. However, because the supply situation remains tight a renewed price rise is probable.”
Additional reporting by Henning Gloystein; Editing by David Goodman and Louise Heavens
