LONDON—Oil prices slid on Friday on concerns over the resilient U.S. crude production and a deal between Iran and the West that could unlock millions of barrels of crude on to the oversupplied world market.

The number of U.S. oil-drilling rigs rose by 12 to 640 in the past week, snapping 29 straight weeks of decline, data from Baker Hughes showed late on Thursday. The rig-count, which some investors see as a proxy for activity in the oil industry, has fallen sharply since oil prices headed south last year. U.S. oil output, however, has remained strong and continued to pressure oil prices.

Brent crude, the global oil benchmark, fell 1.2% to $61.35 a barrel on London’s ICE Futures exchange. In a shortened trading session because of the U.S. Independence Day holiday, U.S. crude futures were trading down 1.1% at $56.31 a barrel on the New York Mercantile Exchange.

“The pickup in activity might be illustrative of the competitiveness of the U.S. shale industry which, thanks to cutting costs, might have become comfortable with producing oil at prices around $60 per barrel,” said Norbert Ruecker, head of commodities research at Julius Baer .

“The U.S. shale industry has become the oil market’s swing producer and its responsiveness to prices will shape the market for the years to come, paving the way for lower prices for longer,” he said.