Oil edges lower, trade thin as some cash in after three-week rally

Mon Apr 17, 2017 3:35pm EDT
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By Devika Krishna Kumar and Julia Simon

NEW YORK (Reuters) - Crude oil prices slipped 1 percent on Monday in subdued trading after a long Easter holiday weekend, on news of rising U.S. shale production and profit-taking following three straight weeks of gains.

On Monday, the Energy Information Agency (EIA) said U.S. shale production in May was set for its biggest monthly increase in more than two years, adding to worries that these increases would undermine efforts of the world's top producers to rein in a glut.

Robert Yawger, director of energy futures at Mizuho Americas said market conditions encouraged profit taking. Speculators in the week to April 11 also increased bets on strong performance in both contracts.

"The market was overbought so these people are definitely booking profits at this point," Yawger said.

Benchmark Brent crude futures ended the session 53 cents lower at $55.36 while U.S. West Texas Intermediate (WTI) crude futures settled down 53 cents at $52.65 a barrel.

Volumes were thin, with about 152,000 Brent futures contracts and about 296,000 WTI contracts changing hands, less than half of Thursday's trading volumes.

With financial markets closed across Europe, the focus was on geopolitical tensions.

The Organization of the Petroleum Exporting Countries will meet on May 25 to consider extending output cuts beyond June to reduce a glut that has depressed prices. Iran fed hopes that OPEC and non-OPEC producers would extend the cuts, but Saudi Arabia's energy minister said it was too early to discuss an extension.   Continued...

A gasoline pump is seen hanging at a petrol station in central Seoul April 6, 2011.  REUTERS/Lee Jae-Won