NEW YORK, March 13 — Oil prices fell yesterday as investors grappled with ongoing concerns over rising US output and tight Opec supply, while last week's data showing speculators cut bets on oil suggested more selling could be seen.
Brent crude futures slipped 54 cents, or 0.8 per cent, to settle at US$64.95 (RM253.38) per barrel. US West Texas Intermediate (WTI) crude futures fell 68 cents, or 1.1 per cent, to settle at US$61.36 per barrel.
Hedge funds and money managers pared their bullish wagers on US crude oil, with long positions falling last week for the first time in three weeks. Gross short positions on the New York Mercantile Exchange climbed to their highest in nearly a month.
That has undercut some of the enthusiasm for oil, as investors weigh increased US supply against the likelihood that the Organisation of the Petroleum Exporting Countries and non-Opec producers will maintain supply cuts that have been in effect for more than a year.
“The market continues to flip back and forth on the idea that increased global demand and a production cut is going to support prices ... but US production, and North American production levels in general, is going to negate a lot of the impact of that,” said Gene McGillian, director of market research at Tradition Energy.
Energy services firm Baker Hughes said on Friday that energy companies last week cut oil rigs for the first time in almost two months.
Still, the United States is now the world's No. 2 crude oil producer, ahead of top exporter Saudi Arabia.
“We are maintaining a bearish trading stance in anticipation of a range in nearby WTI between about US$58 and US$63,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
“While Friday's favourable jobs data and oil rig decline might suggest a test of the high side of this expected range first, we still view downside price risk exceeding that to the upside,” he said.
On Sunday, Iranian oil minister Bijan Zanganeh said Opec could agree in June to begin easing current production curbs in 2019, the Wall Street Journal reported.
Also on Sunday, Saudi officials said they would be delaying the initial public offering of Saudi Aramco until 2019.
This week's Consumer Price Index (CPI) release, given its potential impact on the dollar, could be critical, said Bill Baruch, president of Blue Line Futures in Chicago. The dollar tends to have an inverse relationship with oil prices, as a weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies. — Reuters