Oil futures settled lower Monday, as the latest data fed expectations that USA output will continue to rise this year, erasing some of the price gains scored late last week on a lower weekly US oil-rig count.
The great thing about so many conflicting predictions within the analytical community about the crude market is that no matter what happens, a good portion of that community will be proven correct: and so on Monday those who anxious about the impact of rising USA shale output were vindicated by a 1.1 percent drop in West Texas Intermediate, the result of speculators cutting bullish bets on oil.
Brent sweet crude traded at $65.70 per barrel on Monday, an increase of 21 cents or 0.3 percent from its previous close.
Oil prices fell on Monday as investors grappled with ongoing concerns over rising United States output and tight Opec supply, while last week's data showing speculators cut bets on oil suggested more selling could be seen.
Investors will then be anticipating OPEC's next move as concerns about USA production will likely dominate the oil cartel's June meeting in Vienna.
"From a fundamental standpoint, that is a material concern as the USA oil industry alone could push the global market back into a surplus, which was the reason behind the 2014-2015 bear market in oil", he said in a daily newsletter. Crude oil prices could weaken if the dollar rallies and stocks weaken.
CNBC noted that hedge funds and money managers have pared their bullish wagers on WTI, with long positions falling last week for the first time in three weeks; meanwhile, gross short positions (bets that prices will fall) on the New York Mercantile Exchange climbed to their highest level in almost a month.
On Friday, Baker Hughes (BHGE) said that the number of active USA rigs drilling for oil (http://www.marketwatch.com/story/baker-hughes-reports-first-fall-in-us-oil-rig-count-in-7-weeks-2018-03-09) fell by four to 796 this week.
Nymex reformulated gasoline blendstock-the benchmark gasoline contract-fell 0.6% to $1.89 a gallon. The most bullish scenario will be a weaker U.S. Dollar and higher equity prices.