OIL PRICE: NOT ABOVE $74 YET
REUTERS - Oil eased on Monday on rising U.S. borrowing costs and the prospect of further output rises after another increase in the weekly rig count, although the overall picture for crude remained bullish.
Brent crude futures were down 49 cents at $73.57 a barrel by 0911 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 51 cents to $67.89 a barrel.
"Underlying sentiment is bullish ... we've got an important decision from (U.S. President Donald) Trump coming up in May and we have OPEC potentially trying to 'overtighten' the market," Saxo Bank senior manager Ole Hansen said.
"(Fund managers) need a continuous flow of bullish news for their position to be maintained and this week, it's not a matter of just watching the oil market."
Broader financial markets were under pressure from the rise in U.S. government yields toward 3 percent, a level that in the past has triggered aggressive sell-offs in stocks, bonds and commodities.
"Whether a break above 3 percent will have an impact on currencies remains to be seen, but to have an overall rising cost of finance at a time when Saudi Arabia is aiming at $100, something is going to give. Last time we were at $100 interest rates were rock-bottom and that wasn't a concern to anyone. This time around, it's a different story," Hansen said.
Despite slipping on Monday, the oil market remains well supported, especially by strong demand in Asia.
Prices have risen by 25 percent in the last year thanks to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) that were introduced in 2017 to prop up the market.
"Added price pressure comes from U.S. sanctions against the key oil exporting nations of Venezuela, Russia and Iran," said J.P. Morgan Asset Management Global Market Strategist Kerry Craig. He was referring to action the U.S. government has taken on Russian companies and individuals, as well as on potential new measures against struggling Venezuela and especially OPEC-member Iran.
"Stay long oil," J.P. Morgan said in a separate note.
The United States has until May 12 to decide whether it will leave a nuclear deal with Iran and impose new sanctions against Tehran, including potentially on its oil exports, which would further tighten global supplies.
That said, U.S. drilling activity is now at its highest in three years and a rising weekly rig count points to further increases in U.S. crude production, which is already up by a quarter since mid-2016 to a record 10.54 million barrels per day (bpd).
Only Russia produces more, at almost 11 million bpd.
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API - American Petroleum Institute reported that the first four months of this year saw U.S. petroleum demand average 750 thousand barrels a day above the same period in 2017 despite higher prices, a sign of solid economic activity. April also saw the U.S. produce a record 10.5 million barrels per day (MBD) of oil.
IMF - “Egypt’s growth has continued to accelerate during 2017/18, rising to 5.2 percent in the first half of the year from 4.2 percent in 2016/17. The current account deficit has also declined sharply, reflecting the recovery in tourism and strong growth in remittances, while improved investor confidence has continued to support portfolio inflows. In addition, gross international reserves rose to $44 billion by end-April, equal to 7 months of imports.
BAKER HUGHES A GE - U.S. Rig Count is up 1 rig from last week to 1,046, with oil rigs unchanged at 844, gas rigs up 1 to 200, and miscellaneous rigs unchanged at 2. Canada Rig Count is up 4 rigs from last week to 83, with oil rigs up 6 to 38 and gas rigs down 2 to 45.
REUTERS - Brent crude futures LCOc1 were at $79.57 per barrel at 0310 GMT, up 27 cents, or 0.3 percent from their last close. Brent broke through $80 for the first time since November 2014 on Thursday. U.S. West Texas Intermediate (WTI) crude futures were at $71.62 a barrel, up 13 cents, or 0.2 percent, from their last settlement.