Oil prices retreat on strong Gulf production

Oil prices fell on Monday amid signs that Gulf producers continue to battle for market share with high output.

Despite nervousness over the potential regional impact of the fall of Ramadi, Iraq, to jihadist insurgents and more violence in Yemen, prices ended the day below Friday's close.

US benchmark West Texas Intermediate (WTI) for delivery in June fell 26 cents to $59.43 a barrel.

Brent North Sea crude for July delivery dropped 54 cents to $66.27 a barrel in London trading.

"There was a report about Saudi Arabian exports being at their highest levels since 2005. This served as a reminder that the market is being well-supplied by Saudi Arabia and it seemed to pressure prices back down," said Phil Flynn of Price Futures Group.

Meanwhile, Kuwait said it was working to raise output from alternative oilfields to compensate for the loss of 250,000 barrels per day in a row with Saudi Arabia over fields shared by the two countries.

"We have an ambitious plan to raise output by the end of the year to the level before" the stoppage, Jamal al-Loughani, head of marketing at Kuwait Petroleum Corp, told reporters.

Kuwait has been pumping about 2.9 million barrels a days for several months.

The OPEC exporter cartel "shows no sign of letting up in its own fight for market share," said Jasper Lawler, analyst at traders CMC Markets UK.

A study on the market released by Goldman Sachs trimmed its price targets for the next five years, saying pressure will continue both from OPEC production and from US shale fields which will remain active due to efficiency gains.

Goldman predicted WTI would trade around $52 a barrel this year, above its previous $48 forecast, but rise only to around $60 in three years, compared with $65 previously forecast. After that crude prices will slip back to $50 a barrel by the end of the decade, it said.