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Crude Falls In Asia After Early Gains, U.S. Demand Eyed
May 30, 2017 5:57 AM ET|
Includes: BNO, DBO, DNO, DTO, DWT, OIL, OILK, OILX, OLEM, OLO, SCO, SZO, UCO, U

Crude reversed course and dipped in Asia on Tuesday, despite some upbeat signals on the U.S. summer driving season off to a strong start at the Memorial Day weekend.

The U.S. West Texas Intermediate crude July contract fell 0.04% to $49.78 a barrel. Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London dipped 0.36% to $52.45 a barrel.

The American Automobile Association (AAA) said ahead of Memorial Day that it expected 39.3 million Americans to travel 50 miles (80 km) or more away from home over the Memorial Day weekend.

"That is 1 million more travellers than last year taking to the roads, skies, rails and water, creating the highest Memorial Day travel volume since 2005," the AAA said.

Markets in China and Hong Kong are shut for a holiday.

Overnight, oil prices rose slightly on Monday, barely paring last week's steep losses with the market remaining cautious as increases in U.S. drilling activity have undercut an OPEC-led push to tighten supply.

Trading was subdued due to public holidays in China, the United States and Britain. The market remains uncertain about whether the extension of output cuts by OPEC and other producing countries will be enough to support prices.

An initial agreement, in place since January, would have expired in June.

U.S. drillers have added rigs for 19 straight weeks, bringing the total to 722, the highest since April 2015 and the longest run of additions on record, according to energy services firm Baker Hughes Inc. (NYSE:BHI).

Even if the rig count did not rise further, Goldman Sachs (NYSE:GS) estimated U.S. output would increase by 785,000 bpd between the fourth quarter of 2016 and the fourth quarter of 2017 across the Permian, Eagle Ford, Bakken and Niobrara shale plays.

Analysts will watch whether the OPEC output cuts can reduce the global crude glut.

https://seekingalpha.com/article/4077306-crude-falls-asia-early-gains-u-s-demand-eyed