Oil steadies but under threat from US supply

Oil prices steadied above last week’s seven-month lows on Monday, hemmed in by a relentless rise in US supply, bloated global inventories and a surge in demand for short sale contracts that signal investors see potential for a price fall.

Investors in the US crude futures and options increased their bets against a further rise in prices, as the number of US oil rigs in operation hit its highest in over three years.

US Shale Oil output is up around 10 per cent since last year, while places like Brazil have also hiked output.

The rise in supplies threatens efforts by OPEC and its partners to reduce global oil inventories with production cuts.

Brent crude futures were flat at $45.54 a barrel by 1335 GMT, set for a near 20 per cent drop in the first half of the year. It hit a trough of $44.35 on June 21, its lowest level since November. (Reuters)