Oil rises on dollar, U.S. equities; crude inventories eyed
By Barani Krishnan
NEW YORK (Reuters) - Oil prices ended nearly 1 percent higher on Monday as a softer dollar and stronger U.S. equity markets helped crude futures rebound from an early drop pressured by worries about increased drilling activity for oil in the United States.
Forecasts that U.S. shale oil production could fall for an 11th straight month in October also supported oil prices, although gains were capped by expectations that U.S. stockpiles may have built again last week after a sharp drawdown the previous week.
Brent crude LCOc1 settled up 31 cents, or 0.7 percent, at $48.32 per barrel.
U.S. West Texas Intermediate crude CLc1 rose 41 cents, or nearly 1 percent, to settle at $46.29.
While some oil traders bet on more near-term gains, others were positioning to sell ahead of bearish U.S. government oil inventory data on Wednesday.
Analyst polled by Reuters forecast a 4.5 million-barrel build in U.S. crude stockpiles for the last week, after an unexpected 14.5 million-barrel slump the previous week, the biggest drop since 1999.
"If we get to $47.50 on WTI, I'm shorting it as it seems to be a channel top," said Phil Davis, a trader at PSW Investments in Woodland Park, New Jersey. "Fundamentally, there's little support for crude despite its attempts to hold to a bottom channel of $45 on empty OPEC talk of production cuts."
The Organization of the Petroleum Exporting Countries is meet non-OPEC members at an industry event in Algeria on Sept. 26-28 to discuss a production freeze that few analysts expect will materialize. Continued...