Oil drops Monday as Saudi production remains unchanged; greenback weighs

On Monday Oil prices fell towards $62 a barrel on a strong greenback and on the news Saudi Arabia's production would stay around 10 million barrels per day (bpd) in April.

Brent crude was trading down $1.20 at $62.25 by 1147 GMT, down from an intraday peak of $64.34.

U.S. crude for May delivery was down 74 cents at $55 a barrel, down from an early high of $56.65.

The dollar was up 0.47 percent against a basket of currencies (DXY), damping the price of crude oil.

Saudi Arabian Oil Minister Ali al-Naimi told Reuters that production in the world's biggest crude exporter would stay near record peaks around 10 million bpd in April.

"I have said many times we will always be happy to supply to our customers with what they want. Now they want 10 million," he said.

Earlier this month, Naimi said Saudi Arabia produced 10.3 million bpd of crude in March, eclipsing a previous record of 10.2 million bpd, in what is seen as a move to defend market share against non-OPEC competition, including the United States.

U.S. oil drilling rigs dropped for a record 19th straight week to the lowest since 2010, data from oil services firm Baker Hughes (NYSE:BHI) showed, which has helped lift prices from six-year lows reached in January.

Oil prices have climbed around 17 percent since the beginning of April, as they were pushed up by reports of a possible dip in U.S. output.

However, Morgan Stanley (NYSE:MS) cautioned that Saudi production could be more important than developments in the United States.

"We worry about the market's fixation on the U.S. ... OPEC production may be more important as production increased 1 million barrels per day month-on-month in March. Saudi Arabia alone added the equivalent of half of Bakken (the largest U.S. shale oilfield) production in a matter of months – far beyond any U.S. slowdown," the bank said in a note.