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Monday, May 02, 2016 8:57:01 AM
By Biman Mukherji
Published: May 2, 2016 4:26 a.m. ET
Crude oil prices extended a fall on Monday from the end of last week as profit-taking offset positive sentiment from declining U.S. crude oil production and a weaker dollar.
The profit-taking started end of last week as crude oil prices reached 2016 highs as investors pinned their hopes on expectations that declining crude oil inventories would continue, ignoring persistent over-supply in the market.
“Overall, the supply situation has not changed much,” said Gnanasekar Thiagarajan, director at Commtrendz Risk Management.
Read: Oil’s wild ride set to continue after April’s big climb
On the New York Mercantile Exchange, light, sweet crude futures for delivery in June CLM6, -0.28% traded at $45.60 a barrel, down $0.32, or 0.7%, in the Globex electronic session. June Brent crude on London’s ICE Futures exchange fell $0.53, or 1.1%, to $46.84 a barrel.
Data released by the U.S. Energy Department on Wednesday showed a drop in domestic crude production for the seventh consecutive week, reducing output by 300,000 barrels since the beginning of the year.
“Oil inventories in the U.S. are still rising and production is only ticking down, reflecting the flexibility of U.S. shale oil, higher prices could prevent any further reduction in output,” a report by Capital Economics said.
“What’s more, Saudi Arabia could increase production over the summer when domestic demand peaks,” the report said, adding that oil prices could dip before resuming their upward march this year.
According to an ANZ Bank report, crude oil production by member countries of the Organization of the Petroleum Exporting Countries (OPEC) surged by 484,000 barrels to 33.217 million a day in April.
Analysts said a fundamental rebalancing of oil markets may yet take some time to materialize, before bringing a sustained price recovery.
http://www.marketwatch.com/story/oil-prices-fall-as-investors-continue-to-cash-in-on-aprils-fast-run-2016-05-02?link=MW_popular
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