Oil prices inched down on Tuesday amid limited trading because of a public holiday in the U.S. and ahead of new figures showing U.S. oil output.
Brent crude, the global oil benchmark, fell 0.4% to $49.45 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at $46.91 a barrel.
Overall, crude has experienced modest price increases for about eight days in a row since falling into bear territory last month. The gains have come as the market examines data that show U.S. output may be slowing.
"It's the least interesting day of the week. It's going to be a bit quiet," said Paul Horsnell, the head of commodity research at Standard Chartered, who foresees the market re-examining whether crude was oversold on fears of rising U.S. supply.
"The question being asked is did prices test a bit too far on the downside over the course of the past month or so," said Mr. Horsnell.
Recent data showed modest drops in U.S. oil production, inventory and drilling activity--though at least some of that has been chalked up to bad weather.
Oil-services firm Baker Hughes Inc. said the number of active U.S. oil rigs fell by two in the most recent week, marking the first decline in about five months.
The positive data is fueling hopes that the price declines seen in much of the first half of 2017 has made some U.S. oil producers hold back on expansion plans.
But investors will be watching for additional data to confirm whether the trend is real.
This week's government reports--out Thursday instead of the usual Wednesday because of Independence Day--will be highly scrutinized to "determine whether oil at around $42 is the line between pain and pleasure" for U.S. oil producers, said Ben Le Brun, an analyst at optionsXpress.
It will be another week until there is fresh data from the Organization of the Petroleum Exporting Countries; June's production figures will be out July 12.
The output cuts led by OPEC and Russia have thus far had little impact on pushing global inventories lower, and the resilience of global stocks has fueled this year's price declines. But some have said that because of the massive glut, the effect of production cuts would take a while to surface.
Moreover some analysts have also said production out of Libya and Nigeria is likely to plateau soon because output is near capacity limits in both locales.
BMI Research said the absence of a fresh, steady stream of capital--coupled with unpredictable political climates--should prevent production from accelerating further.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--fell 0.4% to $1.53 a gallon. ICE gasoil changed hands at $450.00 a metric ton, up $1.00 from the previous settlement.
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(END) Dow Jones Newswires
July 04, 2017 06:58 ET (10:58 GMT)