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NYMEX crude falls in early Asia, key reports eyed

Published 03/12/2017, 07:06 PM
Updated 03/12/2017, 07:07 PM
© Reuters.  NYMEX crude down in Asia
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Investing.com - U.S. crude fell in early Asia on Monday with the market poised for a busy week of central bank policy reviews and reports from the Organization of Petroleum Exporting Counties and the International Energy Agency on global supply and demand levels.

On the New York Mercantile Exchange, West Texas Intermediate crude for April dipped 0.87% to 0.$48.07 a barrel, while on the ICE Futures Exchange in London, Brent oil for May delivery was last quoted at $51.30 a barrel.

Last week, oil futures settled at the lowest level since the end of November on Friday, booking a weekly loss of around 9% as concern over rising shale production and record-high U.S. crude inventories offset optimism that OPEC and its allies have been following through on their commitment to cut production.

Concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand pressured crude prices.

Data from oilfield services provider Baker Hughes on Friday revealed that the number of active U.S. rigs drilling for oil rose by 8 last week, the eighth weekly increase in a row. That brought the total count to 617, the most since October 2015.

Meanwhile, the U.S. Energy Information Administration said on Wednesday that crude supplies jumped by 8.2 million barrels last week to yet another all-time high of 528.4 million. It was the ninth straight weekly build in U.S. stockpiles, feeding concerns about a global glut.

Oil prices have been trading in a narrow $5 range around the low-to-mid-$50s over the past three months as sentiment in oil markets has been torn between rising stockpiles and increased shale production in the U.S. and hopes that oversupply may be curbed by output cuts announced by major global producers.

OPEC and non-OPEC countries made a strong start to lowering their oil output by almost 1.8 million barrels per day by the end of June, but so far the move has had little impact on inventory levels.

Kuwait is scheduled to host a ministerial meeting on March 26 comprising both OPEC and non-OPEC members to review compliance with the output agreement and to discuss whether cuts would be extended beyond June.

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