SINGAPORE (Reuters) - Crude oil
prices fell on Monday after U.S. unions called a refinery strike and
traders cashed in on strong price gains last week when the market soared
on a sharp drop in U.S. drilling.
Despite the decline, analysts said that record open interest - the number of outstanding futures contracts - indicated that prices may have bottomed out.
Brent crude oil futures were trading at $51.60 a barrel at 0440 GMT, down $1.39, while U.S. WTI futures were at $46.96, down $1.28 a barrel.
The declines followed a jump back from six-year lows on Friday, as a record weekly decline in U.S. oil drilling fueled a frenzy of short-covering.
"Oil production in the shale basins will inevitably decrease as weaker, higher-cost producers shutter their operations. This supports our view that oil prices will recover this year and average $60 per barrel for Brent," Nomura said.
While the potential drop in U.S. oil output could lift markets in the mid-term, analysts said Monday's declines were a result of profit-taking after last week's gains, as well as rising output by OPEC that was offsetting lower U.S. drilling.
Read more Click here / www.trade4x.net
Despite the decline, analysts said that record open interest - the number of outstanding futures contracts - indicated that prices may have bottomed out.
Brent crude oil futures were trading at $51.60 a barrel at 0440 GMT, down $1.39, while U.S. WTI futures were at $46.96, down $1.28 a barrel.
The declines followed a jump back from six-year lows on Friday, as a record weekly decline in U.S. oil drilling fueled a frenzy of short-covering.
"Oil production in the shale basins will inevitably decrease as weaker, higher-cost producers shutter their operations. This supports our view that oil prices will recover this year and average $60 per barrel for Brent," Nomura said.
While the potential drop in U.S. oil output could lift markets in the mid-term, analysts said Monday's declines were a result of profit-taking after last week's gains, as well as rising output by OPEC that was offsetting lower U.S. drilling.
Read more Click here / www.trade4x.net
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