Oil prices, on Monday, July 3, eased edged downwards for seven sessions in a row, as evidence of rising OPEC crude production snuffed out earlier gains.
Brent crude futures were down 13 cents on the day at $48.64 a barrel by 1000 GMT, off a session high of $49.15.
The price rose 5.2 percent last week in its first weekly gain in six weeks. U.S. crude futures fell 4 cents to $46.00 a barrel.
Drilling activity for new oil production in the United States fell for the first time since January, dropping by two rigs, while U.S. government data showed crude output fell in April for the first time this year.
“Sentiment has turned and I think we should be going up (in price). I don’t think it’s going to last, but the momentum at the moment is with the bulls,” PVM Oil Associates strategist Tamas Varga said.
The drop in U.S. rig count and U.S. Energy Information Administration figures showing output fell by 24,000 barrels per day (bpd) on a monthly basis “sent out a short-term bullish message,” he said.
The oil price is still down 14 percent so far this year, as strong global demand has not been enough to absorb rising output from the United States, Nigeria, Libya and other locations, such as the Brazil and the North Sea.
Despite the dip in U.S. drilling, the total rig count was still more than double the 341 rigs in the same week a year ago, according to energy services firm Baker Hughes Inc.
Oil markets remain oversupplied as output from the Organization of the Petroleum Exporting Countries hit a 2017 high.
“At current output levels, OPEC will not succeed in eliminating the inventory overhang completely by year’s end,” Commerzbank analysts said in a note.
June OPEC production was up by 280,000 bpd at 32.72 million bpd, according to a Reuters survey, despite the group’s pledge to hold back output.
