Light, sweet crude futures for delivery in August CLQ5, -0.61%  fell 35 cents, or 0.6%, to $56.58 a barrel in electronic trading. August Brent crude on London’s ICE Futures exchange LCOQ5, -0.71%  fell 41 cents, or 0.7%, to $61.66 a barrel.
The U.S. oil-rig count rose by 12 to 640 the past week, snapping 29 straight weeks of decline, Baker Hughes data showed. This raised concerns U.S. shale-oil production could remain strong and continue to pressure oil prices.
Though U.S. oil production continues to rise and contribute to the global surplus, rising output from the Organization of the Petroleum Exporting Countries is an even bigger problem, Citi Futures analyst Tim Evans said.
He said it is pretty clear new oil production from southern Iraq and Saudi Arabia are swelling the total, resulting in OPEC production trending higher in coming months if political hurdles are cleared.
“The OPEC production data is consistent with the group’s intent to compete for market share, but we note that they risk owning a larger share of a weaker market,” Evans said in a report.
Meanwhile, Iran nuclear talks continue to drag, but Obama administration officials are eager to reach a deal by Tuesday, a one-week extension to the previous deadline, as further delays would give critics more time to rally against a final agreement with Tehran.
This weekend’s Greek vote in a referendum on creditors’ demands is likely to dominate market sentiment, as it would have implications on the country’s continued membership in the eurozone. U.S. markets will be closed Friday for the July 4th holiday.