Oil prices also fell on Monday after reports indicated that OPEC did not cut production as much as originally promised and that USA drilling continued to increase.
The oil industry in Texas and across the U.S. nervously awaited a weekly report from the U.S. Energy Information Administration on Wednesday, and for the reaction of crude oil traders who bid on New York Mercantile Exchange oil futures.
The data from the U.S. thwarts the Organization of the Petroleum Exporting Countries (OPEC) deal with Russian Federation and other producers to cut production to prop up prices.
The new lows come on the back of Friday's oil rig data from Baker Hughes, which said U.S. drillers added 14 rigs for a total of 631 last week, the most since September 2015. Oil production in the USA has risen to above 9.1 million barrels of oil per day (bpd), from 8.5 million bpd in June 2016.
Riyadh led OPEC and other producers in December to reach their first deal since 2001 to curtail oil output and prop up weak oil prices which had strained many producers' budgets. "So, unless oil demand growth rebounds to record levels in 2017, oil prices could head for another substantial fall", said Leonardo Maugeri, senior fellow at the Harvard Kennedy School's Belfer Centre for Science and International Affairs.
"We don't think a renewed crash in oil prices would have as large an effect on the world economy as it did in 2015-16", said Capital Economic's economist Simon MacAdam.
Futures briefly pared losses after Reuters reported that Opec producers increasingly favour extending production cuts into the second half of the year. Surprisingly, Saudi Arabia raised oil production to 10.01 million bpd from 9.74 million bpd in January.
"Oil has been unable to use the weaker USA dollar to continue its recovery rally from last week's three-month lows as rising U.S. production concerns continue to weigh upon the marketplace", said Henry Croft, research analyst at Accendo Markets. At the same time Russian Federation and other non-OPEC producers' adherence to agreed cuts in the period was only at 37%.
EIA noted that gasoline supplies fell by 3.1 million barrels, and distillate stockpiles dropped 4.2 million barrels last week, too.
Palm oil looks neutral in a range of 2,767-2,810 ringgit per tonne, and an escape could signal a direction, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
State-owned Saudi Aramco has also given additional supplies to Asian customers in April, trade sources said.
A second factor behind the recent decline in oil prices is that USA production has rebounded at a remarkable rate.