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UPDATE 9-Oil down modestly for 4th day; Cushing draw limits loss

Published 24/05/2016, 06:10 am
© Reuters.  UPDATE 9-Oil down modestly for 4th day; Cushing draw limits loss
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* Cushing drawdown report pares crude loss

* Oil tumbled early on Iran plan to ramp up output

* Steady U.S. rig count pressured prices early

* Brent to average $45/barrel this year, WTI $45 -Goldman (New throughout, updates market activity and comments to settlement)

By Barani Krishnan

NEW YORK, May 23 (Reuters) - Oil prices eased again on Monday after Iran vowed to ramp up output and as the number of rigs drilling for crude in the United States held steady after declining for eight straight weeks.

For a fourth day in a row, Brent and U.S. crude prices settled with just modest losses, supported by a stockpile drawdown at a key storage hub for U.S. futures.

Oil has traded in a $5 range below $50 a barrel for the past month, with prices buoyed by supply disruptions from Canada to Venezuela and Nigeria even as a global oversupply and huge speculative bullish positions suggest a sharper correction.

"We are still not seeing any strong technical sell signals beyond the fact that the market is marginally overbought," said Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates.

Early on Monday, crude fell about $1 a barrel or more after Tehran's Mehr news agency quoted Iran's Deputy Oil Minister Rokneddin Javadi as saying crude exports from the OPEC member would grow from 2 million barrels per day to 2.2 bpd by the middle of summer. remarks came after an U.S. industry report on Friday that showed the number of oil drilling rigs in the country holding steady for the first time this year. The report by U.S. oil services firm Baker Hughes was a sign that the slump in the rig count since October 2014 could be ending. RIG/U retraced much of the day's losses after data from market intelligence firm Genscape showed a drawdown of 978,862 barrels at the Cushing, Oklahoma storage hub for U.S. West Texas Intermediate (WTI) futures in the week to May 20.

At the settlement, WTI's front-month CLc1 was down 33 cents at $48.08 a barrel, after plumbing a session low at $47.40.

Brent's front-month LCOc1 settled down 37 cents at $48.35, off the day's low of $47.58.

The market is up 80 percent from 12-year lows hit this winter of around $27 for Brent and $26 for WTI. Even so, it remains less than half of the mid 2014 highs of more than $100.

Speculators banking on further price recovery raised their bullish bets on WTI futures and options last week to the highest level seen in about a year. Net long positions on Brent also rose. Sachs said in a research report it expected U.S. shale crude productivity gains through 2020, which will push average breakevens for shale plays to below $50 per barrel for WTI. raised its average Brent forecast to $45 this year, from $39, and WTI to $45 from $38.

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