Oil price fall in early trading on over supply worries

Brent oil fell to $40.65 in Monday morning session after gains last week that took it to 2016 highs and three are concerns over supply glut in the US.

The US rig count rose for the first time since December 2015, with US energy firms adding one oil rig after 12 weeks of cuts, according to data by industry firm Baker Hughes.

The addition, coming after oil rigs had fallen by two thirds over the past year to 2009 lows, showed the fall in crude drilling stabilizing after a 50 per cent oil price rally since February.

Reports quoting the president of Saudi Arabian Oil co. Amin H. Nasser says he expects oil prices to start adjusting upwards by year-end.

The reports also said Iran is likely to get only a fraction of the $500bn it needs to modernize its oil infrastructure because foreign banks are still unwilling to risk penalties from the US Treasury.

. “The projects are there, they are all ready, but the problem is we need more help from the West,” Maryam Kiaie, business development director at Tehran-based Rah Shahr International Group, said in an interview. “I don’t see any big banks coming here in the next five years.”

Meanwhile, Eni SpA, Italy’s largest oil producer, plans additional asset sales valued at 7 billion euros ($7.9 billion) by 2019 and deeper cost cuts as it seeks to offset the impact of the plunge in oil prices.

The explorer targets production growth of 13% to 2019, while reducing upstream capital expenditure by a further 18% compared with last year’s plan, Rome-based Eni said in a strategy update Friday. Savings from measures including contract renegotiations and synergies with existing assets have brought down break-even costs for new projects to 27 $/bbl of oil equivalent from $45, it said.