Oil slides on profit taking and as OPEC boosts output
By Koustav Samanta
NEW YORK (Reuters) - Oil prices tumbled on Monday, as traders took profits after last week's surge to an 11-week high, and on a report that OPEC continued to boost crude production despite a persistent glut.
Benchmark Brent crude LCOc1 was down $1.05 or, almost 2 percent at $51.60 by 11:28 am EDT after reaching a session high of $53.31.
U.S. light crude CLc1 was down $1.22 or, about 2.5 percent, at $48.41. On Friday, WTI settled at an 11-week high.
"After an 8 percent rally last week and a move up to the 200 day moving average at $51, crude oil has just gone too far too fast and a pull back today was to be expected," said Phillip Streible, senior market strategist at Chicago-based RJO Futures.
Last week, the U.S. front-month crude contract breached the 100-day moving average and almost came within a cent of the 200-day moving average on Friday.
Crude prices were pressured on Monday when secondary sources cited in OPEC's monthly report said the group pumped 31.57 million bpd in September, up 110,000 bpd from August and almost 2 million bpd more than its demand prediction for this year.
OPEC forecast that demand for its oil in 2016 would be much higher than previously thought as its strategy of letting prices fall hits U.S. shale oil supplies. [OPEC/M]
Kuwait Oil Minister Ali al-Omair said there were no calls within OPEC to change the production policy and that lower output from high-cost producers could support prices in 2016, adding to signs OPEC will keep its strategy of defending market share. Continued...