Oil prices fall on continued rise in crude output


The U.S. report of larger than expected supply reports from last week is looking to extend this week according to most market speculations. The Organization of Petroleum Exporting Countries and its allies pledge to curb output may be undermined as the US ships more oil to Asia, according to ING Groep NV.

The most significant price action this week is likely to take place after the release of the American Petroleum Institute's weekly inventories report on Tuesday and Wednesday's U.S. Energy Information Administration report.

Oil market participants are looking ahead to monthly reports from OPEC and the IEA this week to see whether the agencies increase their forecasts for USA crude production, according to Giovanni Staunovo, an analyst at UBS Wealth Management.

Brent crude futures were last up 11c on the day at $65.06 a barrel by 10.17am GMT, up from an earlier low of $64.67, while US West Texas Intermediate (WTI) crude futures were up 17c at $61.53 a barrel. Some of that early slide was probably profit-taking after a rise on Friday, said Jim Ritterbusch, president of energy advisory firm Ritterbusch & Associates. That is not far off the 2.957 percent yield on February 21, the highest since the instrument yielded more than 3 percent in January 2014.

Increased supply did not quell demand for the notes, a positive sign for the heavy issuance expected in the year ahead. "We need to see prices in the short-term trade below $60 to reduce that incentive for USA producers", he said.

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OPEC should beware as USA shale producers are set to steal a bigger slice of the market in Asia, which consumes more oil than any other region, according to industry consultant Wood Mackenzie Ltd.

Last week's U.S.jobs data, as well as an easing of fears of a global trade war, boosted stocks across many parts of the world.

MSCI's world equity index .

Emerging market stocks rose 1.21 percent.

The broader trend remained positive for Wall Street's main indexes, which had closed up almost 2 percent on Friday on the strength of the jobs report. Some of the pressure is coming from a recovery in the U.S. Dollar, which could affect foreign demand. The dollar index fell 0.24 percent, with the euro up 0.26 percent at $1.2337. DXY fell 0.21 percent, with the euro up 0.27 percent to $1.2338.