US crude settles at $48.40, down for 6th straight session on US supply concern
Oil prices traded roughly flat after hitting three-month lows on Monday, as rising inventories and drilling activity in the United States, the world’s top energy consumer, offset optimism over OPEC’s efforts to restrict crude output and reduce a global glut.
After more than two months of reduced production from the Organization of the Petroleum Exporting Countries, the market is facing evidence that U.S. production remains high and global markets remain oversupplied.
On Monday, the Energy Information Administration forecast U.S. shale oil output from seven major production basins would increase by 109,000 barrels a day in April.
“There is growing skepticism that the production cut has been enacted long enough to take care of the overhang,” said Gene McGillian, director of market research at Tradition Energy. “The longs who piled in last year are turning on the market because there seems to be a realization that a six-month agreement isn’t long enough to rebalance the market.