NYMEX crude prices down sharply in Asia as supply worries weigh

Investing.com - Crude oil prices sharply on Monday in Asia as supply worries weighed on sentiment.

On the New York Mercantile Exchange, crude oil for delivery in April plunged 2.19% to $46.03 a barrel.

Last week, crude oil futures fell sharply on Friday to hit the lowest level in six weeks, following the release of a mostly bearish report from the International Energy Agency on global oil supply and demand.

In its closely-watched monthly oil market report released Friday, the IEA warned that an oil-price recovery remained fragile amid a production rebound in the U.S.

The agency added that any appearance of stability in the oil market is tenuous.

Industry research group Baker Hughes (NYSE:BHI) said Friday that the number of rigs drilling for oil in the U.S. fell by 56 last week to 866, the 14th-straight week of declines.

The number of working U.S. oil rigs is 46% lower than an all-time high of 1,609 hit in October.

Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

However, total U.S. crude oil inventories stood at 448.9 million barrels as of last week, the most in at least 80 years, indicating that cheap prices have yet to affect output.

Elsewhere, on the ICE Futures Exchange in London, Brent for April delivery tumbled $2.41, or 4.22%, on Friday to settle the week at $54.67 a barrel by close of trade.

Oil prices have stabilized in the $50-to-$60-region in recent weeks, following a seven-month rout which saw prices drop as much as 60% after OPEC resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.

In the week ahead, market players will focus on the conclusion of the Federal Reserve's two-day monetary policy meeting on Wednesday, which could provide indications on how soon it might raise interest rates.

If the Fed decides to remove a reference to "remaining patient," in its statement, it typically indicates that interest rates could be raised at either of its next two meetings. After next week's meeting, the FOMC will meet in June and September.

Oil traders will also continue to monitor developments surrounding talks between Iran and world powers over Tehran's nuclear program as well as fighting in Libya.

On Monday, the U.S. is to produce reports on industrial production and manufacturing activity in the New York region, as well as private sector data on the housing market.

OPEC will release its monthly report on global oil supply and demand.