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Oil falls as traders cash in after 3 weeks of gains

Published 25/04/2016, 11:03 am
© Reuters.  Oil falls as traders cash in after 3 weeks of gains
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* Dollar jump on Friday also weighs on crude

* Price drops came despite drop in U.S. rig count to 2009 lows

By Henning Gloystein

SINGAPORE, April 25 (Reuters) - Oil prices fell early on Monday as traders took profits after three weeks of gains and as a jump in the dollar late last week was priced into fuel markets.

Front-month Brent crude futures LCOc1 were trading at $44.66 per barrel at 0043 GMT, down 45 cents, or 1 percent, from their last settlement.

U.S. West Texas Intermediate (WTI) futures CLc1 were down around half a dollar, or 1.2 percent, at $43.22 a barrel.

Analysts said the price drops were largely a result of cashing in after three weeks of rising prices. guess (there's been) some profit taking after a strong rally into the end of last week," said Virendra Chauhan of Energy Aspects in Singapore.

Market data shows that the amount of open positions betting on rising WTI prices 1067651MLNG rose to levels last seen in June 2015 last week. At the same time, the amount of deals taken out in expectations of falling prices 1067651MSHT fell close to 2016 lows and levels prior last seen in the second quarter of last year.

"If the selling pressure lasts through today, I suspect there'll be a bit of a dent in the newest data when it gets released tomorrow," said one crude trader.

A jump in the dollar on Friday .DXY against a basket of other leading currencies on expectations that Japan will further extend its aggressive monetary easing through negative interest rates, also dented oil.

A stronger dollar, in which oil is traded, makes fuel imports for countries using other currencies more expensive, potentially hitting demand.

Monday's early oil price drops came despite another decline in the U.S. rig-count that brings activity down for a fifth straight week and to levels last seen in November 2009.

A total of 343 rigs were drilling for new oil last week. That compares to over 700 this time last year, according to oil services company Baker Hughes Inc on Friday.

Energy firms have sharply reduced oil and gas drilling since the collapse in crude markets began in mid-2014, bringing down prices by as much as 70 percent to 13-year lows earlier this year.

(Editing by Richard Pullin)

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