By Biman Mukherji
Oil prices drifted lower on Monday in Asia trade as increased drilling activity in the U.S. weighed on market sentiment.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $48.42 a barrel at 0255 GMT, down 36 cents in the Globex electronic session. May Brent crude on London's ICE Futures Exchange fell 25 cents to $51.50 a barrel.
"Prices are struggling at these levels. Nobody was expecting U.S. shale-oil production to pick up so much and so quickly," said Gnanasekar Thiagarajan, director of Commtrendz Risk Management.
On Friday, Baker Hughes data showed that the number of active U.S. rigs drilling for oil rose by 14 to 631 rigs this week, rising forthe ninth straight week to the highest level since September.
However, talk of the Organization of the Petroleum Exporting Countries extending a six-month pact to cut production beyond June helped to temper the negative sentiment briefly on Friday, resulting in a small increase in prices.
Russia's energy minister also said his country would reduce output by 160,000 barrels a day in March under OPEC's agreement with other producers, without making his position clear about a deal extension. A slight decline in U.S. crude-oil stockpiles also contributed to the sentiment at the end of last week.
Investors are expected to recalibrate their expectations this week, with the market still awash with excess crude-oil supplies, Mr. Thiagarajan said. That is why a weaker dollar, which is typically supportive of crude-oil prices, isn't helping investor sentiment, he said.
Oil-product futures were down.
Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--fell 81 points to $1.5908 a gallon.
ICE gasoil for April changed hands at $456.25 a metric ton, down $0.50 from Friday's settlement.
Write to Biman Mukherji at email@example.com
(END) Dow Jones Newswires
March 20, 2017 00:12 ET (04:12 GMT)
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