Crude was mixed on Monday, with signs of rising U.S. oil production and a stronger dollar pressuring prices, which saw a hefty drop last week.
Leading the losses, U.S. benchmark March West Texas Intermediate crude oil US:CLG9 fell 42 cents, or 0.2%, to $52.50 a barrel, after tumbling 4.6% last week – the largest loss since the week ended Dec. 21, according to Dow Jones Market Data.
International benchmark April Brent LCOJ9, -0.23% inched up 11 cents to $62.21 a barrel, after dropping 1% last week.
Baker Hughes BHGE, +0.90% on Friday reported that the number of active U.S. rigs drilling for oil rose by 7 to 854 last week. The rig count declined by 15 a week earlier, while the total active U.S. rig count edged up by 4 to 1,049.
Another factor hitting oil was a reported fire on Sunday at the Phillips 66 Wood River, Illinois, refinery, resulting in the loss of 120,000 barrels per day (bpd) of oil, according to Reuters.
Traders continued to weigh up risks to global supply from OPEC output cuts and U.S. sanctions on Venezuela. Both offer support to prices, but signs of a weakening global economy have raised concerns about a slowdown in energy demand.
Craig Erlam, senior market analyst at OANDA, said a stronger dollar was also pressuring oil prices. The ICE Dollar Index DXY, +0.08% rose over 1.1% last week, and rose 0.3% on Monday. Dollar strength makes commodities priced in the unit less attractive to investors using another currency.
Erlam said investors will be watching out for the OPEC monthly report on Tuesday, which should provide clearer insight into how the oil cartel and its allies are complying with their global output agreement. “With there being so many doubts over global growth this year, it will also be interesting to see what impact this has on the cartel’s assessment of demand growth and whether that will exacerbate the oversupply issue,” he said.
Among other energy contracts, March natural gas NGH19, +4.26% surged 4% to $2.69 per million British thermal units. Last week, prices lost about 5.5%.
In other Nymex trading, March gasoline RBH9, +0.03% rose 0.3% to $1.45 a gallon, and March heating HOH9, +0.18% was up 0.3% ay $1.914 a gallon.
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