Oil's near $62 as United States jobs fan optimism, rig drop eases fears

Pipelines at Enbridge Inc.'s tank farm in Oklahoma. Oil futures have been buffeted as U.S. output has increased and crude stocks have swelled to record highs

Oil slips as higher US output looms despite dip in drilling

NEW YORK, March 12 (Reuters) - Oil prices fell on Monday as investors grappled with ongoing concerns over rising US output and tight OPEC supply, while last week's data showing speculators cut bets on oil suggested more selling could be seen.

Oil held gains above $62 a barrel after US crude explorers curtailed activity for the first time since January.

After the USA boosted rigs drilling for oil for six straight weeks, American explorers idled four rigs last week, easing fears over surging shale production.

Iran wants OPEC to work to keep oil prices around $60 a barrel to contain US shale producers, Oil Minister Bijan Zanganeh told The Wall Street Journal in a rare interview, while Saudi Arabia has played down shale's ability to upset the market and has indicated $70 for oil is acceptable. A stronger dollar would likely dent oil prices. Explorers idled four oil rigs in the USA, bringing the total to 796, Baker Hughesdata released Fridayshowed.

Meanwhile, data out Friday did show that hedge funds and money managers cut their bullish bets on USA crude oil for the first time in three weeks.

West Texas Intermediate, the USA marker, is now near $62 a barrel. Total volume traded was about 34% below the 100-day average.

Brent sweet crude traded at $65.70 per barrel on Monday, an increase of 21 cents or 0.3 percent from its previous close.

The US economy added the biggest number of jobs in more than 1-1/2 years in February, with non-farm payrolls jumping by 313,000 jobs last month, the Labor Department said on Friday. The contract climbed 3% to $65.49 on Friday.

Still, fears over increasing United States production continue to weigh on producers and investors.

It is not clear when the deal to withhold output will end, but Iranian oil minister Bijan Zanganeh said Opec could agree in June to begin easing current oil production curbs in 2019, the Wall Street Journal reported on Sunday.

Oil risks sliding back under $60 a barrel as a surge in USA shipments to Asia threatens to undermine a deal between OPEC and its allies, according to ING Groep NV. The fallout could drag down prices to under $60, he said. Hedge funds boosted bets on falling WTI prices by the most this year after American production surged to record levels, according to the US Commodity Futures Trading Commission.

"Nothing really stood out", said Goncalves, head of US rates strategy at Nomura Securities International in New York."You can consider that a good thing, given this year will see more and more Treasuries issued".

Latest News