Oil prices have dropped to their lowest in three months despite OPEC efforts to curb crude output, dragged down as U.S. drillers kept adding rigs. Laura Frykberg reports
Oil prices dip to a three-month low. Brent Crude dropping to just over $51 a barrel. And West Texas down to $48.30. Overproduction by OPEC is no longer the problem - last year it agreed to cut supply. It's now a country outside the bloc, trying to fill its own tank. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "There is rising evidence to suggest that U.S. shale producers are coming back to the market. They're starting to think about ramping up their capacity. And as a consequence there is a very strong likelihood that it will be the United States that leads to a rising oil surplus on oil markets." And it's showing no sign of slowing down. U.S. drillers have added oil rigs for an eighth consecutive week. While crude inventories recently surged by 8.2 million barrels. An expected Fed rate hike would only strengthen the American industry. Making it more expensive for importers of U.S. shale. That's sent alarm bells ringing at Russia's Rosneft. The oil major warning if the U.S. continues down this road - the OPEC deal will be short-lived.