Oil prices fell around 2 percent on Monday, with a firmer dollar and signs of more U.S. Gulf oil output coming back online weighing on prices.
Benchmark Brent crude futures fell 1.9 percent to $73.90 a barrel, while U.S. crude futures were down as much as 2.3 percent at $70.20.
Supply concerns subsided amid recovery in the Gulf of Mexico. As of Friday, 23 percent of US’ Gulf of Mexico crude output, or 422,078 barrels per day, remained shut, the Bureau of Safety and Environmental Enforcement reported.
Meanwhile, according to a report from Baker Hughes, the oil and gas rig count in the U.S. increased by nine to 512 in the week to September 17, the highest level since April 2020.
The total rig count is now up 101 percent over this time last year. Oil rigs rose by 10 to 411 in the week, while gas rigs fell one to 100. The U.S. is the largest consumer in the world.
A stronger dollar also kept oil under pressure. The dollar, seen as a safe-haven, hit a one-month high as rising risk aversion amid pending catastrophe at developer China Evergrande Group weighed on equity markets.
Evergrande’s Hong-Kong listed shares plunged to an 11-year low as fears grew of a default on $300 billion of debt.