Oil down on continued concerns over U.S. output
Oil prices fell on Monday as investors grappled with ongoing concerns over rising U.S. output and tight OPEC supply, while last week`s data showing speculators cut bets on oil suggested more selling could be seen.
Brent crude futures were down $1.16, or 1.8 percent, by 11:45 a.m. EDT (1545 GMT), to trade at $64.33 per barrel.
U.S. West Texas Intermediate (WTI) crude futures fell $1.21, or 2 percent, to $60.83 per barrel.
Hedge funds and money managers have pared their bullish wagers on U.S. crude oil, with long positions falling last week for the first time in three weeks. Gross short positions on the New York Mercantile Exchange climbed to their highest level in nearly a month.
That has undercut some of the enthusiasm for oil, as investors weigh increased U.S. supply against the likelihood that the Organization of the Petroleum Exporting Countries and non-OPEC producers will maintain supply cuts that have been in effect for more than a year.
"The market continues to flip back and forth on the idea that increased global demand and a production cut is going to support prices... but U.S. production, and North American production levels in general, is going to negate a lot of the impact of that," said Gene McGillian, director of market research at Tradition Energy.
Energy services firm Baker Hughes said on Friday that energy companies last week cut oil rigs for the first time in almost two months.
Still, the United States is now the world`s no. 2 crude oil producer, ahead of top exporter Saudi Arabia.
On Sunday, Iranian oil minister Bijan Zanganeh said OPEC could agree in June to begin easing current oil production curbs in 2019, the Wall Street Journal reported.
Also on Sunday, Saudi officials told their British counterparts that they would be delaying the initial public offering of Saudi Aramco until 2019.
This week`s Consumer Price Index (CPI) release, given its potential impact on the dollar, could end up being critical, said Bill Baruch, president of Blue Line Futures in Chicago. The dollar tends to have an inverse relationship with the price of oil, as a weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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