Oil bounces higher after last week's losses

Oil bounces higher after last week's losses

Investing.com  | Jun 19, 2017 08:22

Oil rebounds after last week's losses

Investing.com - Oil prices pushed higher in North American trading on Monday, bouncing back from the prior week's losses, but gains were limited as the market weighed ongoing efforts by major producers to cut output and reduce a global glut against a relentless increase in U.S. drilling activity.

The U.S. West Texas Intermediate crude July contract was at $45.09 a barrel by 8:10AM ET (1210GMT), up 12 cents, or around 0.3%. Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London tacked on 21 cents to $47.58 a barrel.

WTI lost $1.13, or about 2.4%, last week, while Brent fell 78 cents, or roughly 1.6%. Both have now posted losses four weeks in a row, which marks the longest weekly losing streak since August 2015 for WTI.

Concern that the ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance the market remained in focus.

U.S. drillers last week added rigs for the 22nd week in a row, according to data from energy services company Baker Hughes, implying that further gains in domestic production are ahead.

The increase in U.S. drilling activity and shale production has mostly offset efforts by OPEC and other producers to cut output in a move to prop up the market.

Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.

Meanwhile, traders will also continue to pay close attention to comments from global oil producers for evidence that they are complying with their agreement to reduce output this year.

Elsewhere on the Nymex, gasoline futures for July rose 0.4 cents, or around 0.3%, at $1.459 a gallon, while July heating oil tacked on 0.3 cents to $1.430 a gallon.

Natural gas futures for July delivery sank 14.0 cents, or almost 5%, to $2.895 per million British thermal units, a level not seen since mid-March.

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