Oil futures rebounded some to start the week in Asian trading after skidding 7% last week, but market players doubt bargain buying will be enough to hoist US benchmark prices away from $50 a barrel near-term.
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Crude came under fresh pressure midweek as U.S. production showed further growth and gasoline supplies surprisingly increased.
Meanwhile, more investors are now second guessing whether current production cuts by Organization of the Petroleum Exporting Countries and Russia will ultimately be enough to sufficiently cut into global supplies amid the new gusher of U.S. oil. Data on Friday showed the number of active oil rigs in the U.S. has risen for 14th straight weeks to hit their highest level in more than a year.
Doubts are so pronounced that even with typical bullish factors like a weaker greenback and simmering geopolitical tensions, oil prices are only modestly higher on Monday, said Michael McCarthy of CMC Markets.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in June was recently up 0.4% at $49.83 a barrel in the Globex electronic session. June Brent crude on London's ICE Futures exchange gained 0.5% to $52.23.
Helping risk sentiment broadly across markets is results from the first round of France's presidential election coming in as expected. Analysts say the outcome has reduced, but not yet completely wiped out, the possibility of France leaving the European Union.
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"But still, even this is not enough to hold up the upward momentum," said Mr. McCarthy.
Crude traders, however, continued to closely eye OPEC. To date, the cartel has reached a tentative agreement to sideline its production beyond June, but there's no consensus for how long and who are committed to such an extension.
"What worries the market is what if production cut doesn't work. What else can OPEC do?" said Gao Jian, an analyst at SCI International.
Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 0.4% to $1.6505 a gallon, May diesel gained 0.3% to $1.5582 and ICE gasoil advanced 0.6% to $470.25 a metric ton.
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(END) Dow Jones Newswires
April 23, 2017 23:26 ET (03:26 GMT)