Oil prices edged lower Monday morning, pulled lower by falling prices for gasoline and diesel as the end of summer driving season approaches.
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U.S. crude futures recently traded down 42 cents, or 0.87%, at $48.09 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 74 cents, or 1.4% to $51.98 a barrel on ICE Futures Europe.
Concerns that summer driving season is waning with still high levels of gasoline and diesel in storage have taken hold, pulling prices lower, analysts said.
"We have more than adequate inventory and the Labor Day holiday is nearly upon us," said Andy Lipow, president of Lipow Oil Associates. "The market is definitely under pressure from the gasoline and diesel side."
Gasoline futures recently fell 4 cents, or 2.46%, to $1.5840 a gallon. Diesel futures fell 3.6 cents, or 2.22%, to $1.5844 a gallon.
The move lower reverses some of Friday's gains. Oil prices rose sharply Friday as refinery issues propelled gasoline and diesel futures higher, taking crude along with them.
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"Those concerns are subsiding this morning, with refined products leading a selloff that threatens to put the complex right back into the sideways trading range that's held the action for most of the month," analysts at TAC Energy wrote in a client note Monday.
Those worries outweighed figures showing that production by the Organization of the Petroleum Exporting Countries is falling. OPEC's production is forecast to fall 419,000 barrels a day this month, to 32.8 million barrels a day, according to Petro-Logistics -- halting the increase seen in the previous month when compliance with the group's production cut agreement fell to its lowest level of the year.
The cartel's exports fell by 750,000 barrels a day in the first half of August, Petro-Logistics said.
OPEC and 10 producers outside the cartel, including Russia, first agreed late last year to cap production at around 1.8 million barrels a day lower than peak October 2016 levels, with the goal of reducing the global oil glut and boosting prices. The deal was extended in May until March 2018.
OPEC is set to hold a technical meeting in Vienna on Monday to discuss compliance levels with the cartel's production cut deal.
Investors Monday were also looking ahead to see whether weekly U.S. data on Wednesday would confirm a further drawdown in U.S. crude stocks, according to Giovanni Staunovo, a commodities analyst at UBS Wealth Management.
"There is the risk that inventories start to increase again" if the recent decline in stocks was primarily fueled by seasonal factors like increased car usage, Mr. Staunovo said.
The U.S. Energy Information Administration said last week that crude inventories had been reduced by 9 million barrels in the week ended Aug. 11, bringing the total drawdown since March to 69 million barrels.
At the same time, oil-field services firm Baker Hughes Inc. said Friday that the number of rigs drilling for oil in the U.S. fell by five in the previous week, a further sign that drillers are responding to the lower price environment by pulling back.
--Benoit Faucon and Sarah McFarlane contributed to this article.
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(END) Dow Jones Newswires
August 21, 2017 11:26 ET (15:26 GMT)