OIL PRICE: ABOVE $55 STILL
REUTERS, BLOOMBERG - Crude oil slid lower on Monday on signs that the United States is continuing to add output, largely counteracting strong economic growth in China and OPEC efforts to cut production.
Benchmark Brent crude futures were down 53 cents at $55.36 at 0836 GMT (4:36 a.m. ET). On Thursday, before major markets closed for a holiday break, they settled up 3 cents at $55.89 a barrel.
U.S. West Texas Intermediate (WTI) crude futures were down 46 cents at $52.72 a barrel, after rising 7 cents to $53.18 on Thursday.
Both benchmarks had risen last week for a third consecutive week, with Brent adding 1.2 percent over the four days before the Good Friday holiday and WTI up 1.8 percent.
While trading was subdued, the focus was on indications that shale oil output in the United States was pressing higher.
"All the signs of an ever-growing bull market are starting to fade away, (with) Libya and geo-political tensions easing, but also because the Texans are back and they are pumping like there's no tomorrow," said Matt Stanley, a fuel broker at Freight Investor Services (FIS) in Dubai. "If I were OPEC, I'd be pretty worried."
Although the failure of a ballistic missile launch in North Korea brought some respite, markets were braced for further tensions in the region.
In Libya, fighting between rival factions has cut oil output, but state oil company NOC was able to reopen at least one field and was pushing to reopen another.
U.S. drillers last week added rigs for a 13th straight week, a sign output gains there will continue.
Energy services firm Baker Hughes said on Thursday drillers added 11 oil rigs in the week to April 13, bringing the count up to 683, highest in about two years.
Increasing U.S. output is undermining attempts by the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers to curb output and sustain a rally in prices in a market that has been oversupplied since mid-2014.
U.S. crude oil production has climbed to 9.24 million barrels per day (bpd), according to the latest Energy Information Administration data, making it the world's third-largest producer after Russia and Saudi Arabia.
The increasing production largely counteracted figures showing first quarter economic growth of 6.9 percent in China. Forecast-beating March investment, retail sales and exports all suggested China's economy, the world's second-largest oil consumer, may carry solid momentum into spring.
Additionally, Iran added fuel to hopes that OPEC and non-OPEC oil producers could extend their output cuts beyond the initial six-month agreement. Any cut extension could help underpin prices.
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BP and its partners in Azerbaijan's giant ACG oil production complex agreed Thursday to extend the production sharing contract by 25 years to 2049 and to increase the stake of state-owned SOCAR, reducing the size of their own shares.
The U.S. current-account deficit increased to $123.1 billion (preliminary) in the second quarter of 2017 from $113.5 billion (revised) in the first quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.4 percent in the first quarter.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading up 41 cents, or 0.8 percent, at $50.30 by 0852 GMT, near the three-month high of $50.50 it reached last Thursday. Brent crude futures LCOc1, the benchmark for oil prices outside the United States, were at $55.91 a barrel, up 29 cents, and also not far from the near five-month high of $55.99 touched on Thursday.
“The principal risk regarding Russian and Chinese activities in Venezuela in the near term is that they will exploit the unfolding crisis, including the effect of US sanctions, to deepen their control over Venezuela’s resources, and their [financial] leverage over the country as an anti-US political and military partner,” observed R. Evan Ellis, a senior associate in the Center for Strategic and International Studies’ Americas Program.