Oil settles a tad lower after sliding to 3-month lows

Mon Mar 13, 2017 5:47pm EDT
 
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By Jessica Resnick-Ault

NEW YORK (Reuters) - Oil prices settled a few cents lower on Monday, retracing much of an early retreat to three-month lows in a steep slide that began last week as investors wondered whether swelling U.S. crude supplies would hinder OPEC's efforts to restrict output and reduce a global glut.

Analysts said the slump may not have much further to go now that prices have fallen more than 8 percent since last Monday, the biggest week-on-week drop in four months.

Prices had risen on more than two months of reduced production from the Organization of the Petroleum Exporting Countries. Now, the market faces evidence that U.S. production remains high and global markets remain oversupplied.

"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."

The steep price slide could slow as traders finish unwinding bullish long positions, McGillian said.

Brent crude futures LCOc1 settled down 2 cents at $51.35 a barrel. The session low was $50.85, the lowest since Nov. 30.

U.S. West Texas Intermediate crude (WTI) CLc1 settled down 9 cents at $48.40 a barrel.

Goldman Sachs said in a note it remained "very confident" about commodity prices and maintained its price forecast of $57.50 for WTI in the second quarter.   Continued...

 
FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014.  REUTERS/Todd Korol/File Photo