Oil came under pressure on Monday on signs a multi-week rally was encouraging a rejuvenation in already bloated U.S. shale supplies.
U.S. crude prices gained on a weekly basis for an eighth straight week last week while Brent had its first profit-taking in five weeks.
In a sign the market was responding to those gains, rigs for drilling oil in the voluminous Permian shale basin rose for the first time this year after months of cutbacks.
U.S. crude futures were down 49 cents at $58.90 a barrel by 11:48 a.m. EDT (1548 GMT).
Brent crude futures, the more globally referenced benchmark for oil, fell 85 cents to $64.54.
The market’s drop was limited by China’s third rate cut in six months which raised hopes the world’s No. 1 energy consumer will help absorb some of the excessive crude supplies.
And despite the gains in the Permian Basin, the overall number of active oil rigs in the United States has declined for a 22nd week in a row, although the rate of decline has slowed lately.
“It’s pretty choppy as people try to figure out a clearer supply-demand situation,” Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut, said, referring to Monday’s action.
via Reuters
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