Investing.com – Crude oil prices settled higher on Monday as signs of tightening in U.S. drilling activity lifted sentiment while ongoing political tensions in the Iraq continued to disrupt crude supplies.
On the New York Mercantile Exchange crude futures for December delivery rose 6 cents to settle at $51.90 a barrel, while on London's Intercontinental Exchange, Brent lost 40 cents to trade at $57.35 a barrel.
Crude oil prices ended the session on the front foot as traders cheered news suggesting oil exports from Northern Iraq dropped sharply amid ongoing political unrest in Northern Iraq.
As of Sunday, oil exports from Iraq's Kurdistan via the Turkish Mediterranean port of Ceyhan continued to come under pressure, flowing at sharply reduced rates between 200,000 and 250,000 barrels per day, Reuters reported, citing two shipping sources.
The uptick in political tensions in Northern Iraq follows conflict between Iraqi and Kurdish forces last week, as Kurdish forces retreated from Northern parts of Iraq, ceding control of two major oilfields.
That added to positive sentiment on oil prices amid signs of a drop in U.S. drilling activity. Baker Hughes on Friday said the number of active U.S. oil rigs declined for a third straight week.
“Fundamentals continue to favor the bulls right now, as the relentless rise in U.S. production has finally stalled as OPEC optimism has risen, and demand outlooks have improved,” wrote Tom Essaye, editor of The Sevens Report, on Monday.
Analysts at Commerzbank, however, warned that drilling activity could pick up pace “in the coming months”, and expected prices of both Brent and Crude Oil to “correct" in the short term.
Expectations of an increase in output has failed, however, to weigh on sentiment as data showed traders increased their bullish bets on crude oil futures last week.
Net bullish bets on Crude Oil rose to 429,500, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.