Oil prices dip on profit taking after big weekly gain

Crude oil futures slipped on Monday as investors cashed in some profits from last week`s strong rise, but concerns about Saudi-Iran tensions kept losses in check.

Brent crude futures were down 58 cents at $69.89 a barrel at 11:28 a.m. EDT (1528 GMT). U.S. West Texas Intermediate (WTI) crude futures lost 57 cents to $65.31.

Last week, Brent gained 6.4 percent and WTI rose 5.7 percent, the strongest weekly gains since July.

"I don`t see anything extraordinarily bearish in the market today. I think some folks here are just...happy to take profits," said Bob Yawger, director of energy futures at Mizuho in New York.

Although crude and product futures slipped on Monday, most share prices for energy companies and refiners in particular were up, Yawger said. The S&P Energy Index was up 0.4 percent.

Global stocks came off six-week lows on reports that the United States and China were set to begin trade talks, easing fears about a trade war. Analysts had been concerned that a trade war could hurt oil demand.

U.S. President Donald Trump last week signed a memorandum that could impose tariffs on up to $60 billion of imports from China.

Crude was also pressured by a rise in the number of active U.S. oil rigs to a three-year high of 804 on Friday, implying further rises in production. U.S. oil output has already jumped by a quarter since mid-2016 to 10.4 million barrels per day (bpd).

"With US crude production likely to be close to 10.5 million bpd by now and NGL (natural gas liquids) output also increasing strongly, there is a clear chance that year-on-year supply growth in the U.S. could at least temporarily hit 2 million bpd over the summer months," JBC analysts wrote.

The market found some support from rising Middle East tensions.

Saudi air defenses shot down ballistic missiles fired by Yemen`s Iran-aligned Houthi militia on Sunday, some of which targeted Saudi capital Riyadh.

In Asia, Shanghai crude oil futures made a strong debut in terms of volume as investors and commodity merchants bought into the world`s newest financial oil trading instrument.

Hedge funds and other money managers raised their net long U.S. crude futures and options positions in the week to March 20 after two weeks of cutting bullish bets, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)