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By Bloomberg

Oil held its biggest weekly loss since March on speculation a global surplus will persist as Iran pledges to boost exports amid unyielding OPEC production.

Futures slid 0.4 percent in London, extending last week’s decline of 3.4 percent. Investors will increasingly turn their attention to the risk of Iranian shipments adding to global supply after the Organization of Petroleum Exporting Countries decided to maintain its output target, Morgan Stanley said. The nation could double exports within six months of international sanctions being lifted, according to its OPEC representative.

Oil’s rally from a six-year low in January has faltered as OPEC pumps the most since 2012. While U.S. producers have idled a record number of rigs and explorers around the world cut spending plans, the prospect of increased shipments from Iran is adding to speculation the global glut will persist.

“In terms of OPEC, it’s total stalemate until the sanctions on Iran are lifted,” Olivier Jakob, managing director at Petromatrix GmbH, said by e-mail from Zug, Switzerland. “There are still different opinions about the timing and size of Iran’s comeback.”

Brent for July settlement was at $63.06 a barrel on the London-based ICE Futures Europe exchange, down 25 cents, at 10:15 a.m. local time. The European benchmark crude traded at a premium of $4.27 to West Texas Intermediate, the U.S. marker grade. Prices have slid 10 percent this year.

Iran Supply

WTI for July delivery slipped 30 cents to $58.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 1.9 percent last week, the first decline since March. The volume of all futures traded was 42 percent below the 100-day average for the time of day.

Iran’s oil exports were reduced to about 1 million barrels a day in mid-2012 following sanctions against its nuclear program. It may start shipping crude to Russia this week as part of an oil-for-goods agreement, Oil Minister Bijan Namdar Zanganeh said at the weekend after OPEC’s meeting Friday.

“Investors will be searching for a catalyst to provide direction for oil prices,” Morgan Stanley analysts including Adam Longson in New York said in a report. World powers including Russia and the U.S. plan to complete talks with Iran by June 30 to end the decade-long impasse over its atomic program.

U.S. Drillers

OPEC, which pumps about 40 percent of the world’s oil, agreed to keep its crude-output quota at 30 million barrels a day at the Vienna gathering on June 5. The 12-member group has exceeded that target every month in the past year, data compiled by Bloomberg showed.

In the U.S., drillers idled more rigs in what’s become the most protracted retreat from American oil fields. The number of machines decreased by four to 642 in the week to Friday, according to Baker Hughes Inc. That’s the lowest level since August 2010.

The rig count in the Eagle Ford shale formation in Texas, one of the country’s most prolific fields, shrank by four to 86, the oil-services company said on its website. It gained by one in the Permian Basin, the largest U.S. oil field.

Chinese Imports

While drilling has slowed, U.S. production remains at a record. Output averaged 9.59 million barrels a day through May 29, the fastest pace in weekly data compiled by the Energy Information Administration since January 1983.

“It’ll be hard to see an additional cut in the number of U.S. rigs at this price level,” said Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul. “Producers can maintain the rigs they have as they have closed all the inefficient rigs.”

In China, refiners imported the least crude in 15 months, a slowdown that could worsen the global surplus. Overseas purchases slid to 23.24 million metric tons in May, according to preliminary data released by the General Administration of Customs in Beijing. That’s equivalent to 5.5 million barrels a day, down from a record 7.4 million a day in April.