Investing.com - Worries over increased global supplies are likely to take a toll on oil prices in the week ahead, after they logged their fourth straight weekly loss last week amid emerging evidence of oversupply.
Russia’s energy minister, Alexander Novak, indicated Friday that a coalition of producers could pump more oil than agreed by year-end, a move which could signal the possible death of an OPEC production deal.
Speaking on the sidelines of the BRICS summit in Johannesburg, South Africa, Novak said he “did not rule out…an increase in oil production in excess of 1 million barrels a day may be discussed.”
The Organization of the Petroleum Exporting Countries (OPEC) and other oil producers led by Russia agreed last month to ease production curbs to make up for lost supplies out of Libya, Venezuela and Iran.
The deal effectively increases combined oil output by 1 million barrels per day (bpd).
Meanwhile, oil traders will continue to monitor any potential disruptions to oil flows, especially from the Middle East.
Last week, Saudi Arabia temporarily paused shipments through the Red Sea's Bab el-Mandeb strait, one of the world's most important tanker routes, after two of its oil tankers were reportedly attacked by Houthi rebels.
An estimated 4.8 million bpd of crude oil and refined products flowed through the Bab al-Mandeb strait in 2016 toward Europe, the U.S. and Asia, according to the U.S. Energy Information Administration.
Elsewhere, fresh weekly data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise will capture the market's attention.
U.S. oil production reached 11 million bpd for the first time earlier this month. The country has added nearly 1 million bpd in production since November, thanks to rapid increases in shale drilling.
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.
U.S. benchmark oil, September West Texas Intermediate WTI crude, ended Friday's session down 92 cents, or 1.3%, at $68.69 a barrel, posting a fourth straight week of declines, falling 2.5%.
Elsewhere, September Brent crude, the global benchmark, fell 25 cents to $74.29. Despite Friday's decline, Brent prices hung on to a 1.7% weekly rise, buoyed by the disruption to Saudi oil flows.
Oil prices are on track to end the month down roughly 7% amid growing indications of higher production from Saudi Arabia, Russia and the United States.
Ahead of the coming week, Investing.com has compiled a list of the main events likely to affect the oil market.
Tuesday, July 31
The American Petroleum Institute is to publish its weekly update on U.S. oil supplies.
Wednesday, August 1
The U.S. Energy Information Administration will release its weekly report on oil stockpiles.
Friday, August 3
Baker Hughes will release weekly data on the U.S. oil rig count.