|
Losses were limited by a tightening of global supplies, as
output has fallen in Iran and Venezuela amid signs the United
States will further toughen sanctions on those two OPEC
producers.
Brent crude futures were at $70.95 a barrel at 1050 GMT, down 60
cents, or 0.85 percent, having hit their highest since Nov. 12
on Friday at $71.87.
U.S. West Texas Intermediate crude futures were at $63.30 per
barrel, down 59 cents or 0.93 percent.
"I would expect oil to trade in a relatively tight band around
$70 for the time being," said Virendra Chauhan, oil analyst at
Energy Aspects in Singapore, pointing to differing signs from
the United States and OPEC on future supply.
"Leading edge indicators on U.S. supply suggest activity levels
are stepping up, which is supportive for strong production
growth in the second half," Chauhan said.
But at the same time, "murmurings from various ministers of the
OPEC+ pact suggest supply from the group will not be ramped up
pre-emptively as per last summer," he said.
The Organization of the Petroleum Exporting Countries and its
allies meet in June to decide whether to continue withholding
supply. OPEC, Russia and other producers are reducing output by
1.2 million barrels per day from Jan. 1 for six months.
OPEC's de facto leader, Saudi Arabia, is considered keen to keep
cutting, but sources within the group said it could raise output
from July if disruptions continue elsewhere.
Russian Finance Minister Anton Siluanov said over the weekend
that Russia and OPEC may decide to boost production to fight for
market share with the United States, but this would push oil as
low as $40 per barrel.
U.S. energy companies last week increased the number of oil rigs
operating for a second week in a row.
(GRAPHIC: U.S. Rig count - https://tmsnrt.rs/2X8Myf7)
On the bullish side, the head of Libya's National Oil Corp
warned on Friday that renewed fighting could wipe out crude
production in the country.
Production has been also falling steeply in Venezuela due to
U.S. sanctions. Iranian output is expected to suffer when
the United States tightens sanctions on Tehran in May.
"We see a risk of a spike in oil prices by year-end," said Bank
of America Merrill Lynch, citing a weakening dollar and a surge
in distillates demand due to rule changes for marine fuels.
(Editing by Dale Hudson)
[© 2019 Thomson Reuters. All rights
reserved.] Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
