Oil prices edge down but optimism remains

Crude oil prices turned lower on Monday, but the commodity remained supported within close distance of recent multi-year highs amid overall optimism over the rebalancing of the market.

The U.S. West Texas Intermediate crude March contract was down 56 cents or about 0.85% at $65.58 a barrel by 04:00 a.m. ET (08:00 GMT), still close to last Thursday’s three-year peak of $66.66.

Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London lost 80 cents or about 1.14% at $70.88 a barrel, off Thursday’s three-year high of $71.28.

Oil prices have climbed nearly 60% from around $43 a barrel in June, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

However, analysts and traders have recently warned that U.S. shale oil producers could ramp up production as they look to take advantage of higher prices, potentially derailing OPEC’s effort to curb excess supply.

General Electric (NYSE:GE)’s Baker Hughes energy services firm reported on Friday that the number of oil drilling rigs in the U.S. climbed by 12 to 759 last week, marking the biggest weekly increase in the rig count since March.

Elsewhere, gasoline futures declined 0.40% to $1.919 a gallon, while natural gas futures lost 1.54% to $3.124 per million British thermal units.