MTECHTIPS;-Oil prices fall after rally encourages profit-taking

MTECHTIPS;-Oil prices fall after rally encourages profit-taking

MTECHTIPS-Oil prices fell on Monday as a rally at the end of last week prompted investors to close positions at a higher price, against a backdrop of signs the global market is starting to re balance. Benchmark Brent crude futures (LCOc1) were down 29 cents at $52.43 a barrel at 0856 GMT, after surging more than 3 percent in the previous session. U.S. West Texas Intermediate crude futures (CLc1) traded at $48.39 a barrel, down 12 cents. The contract had also risen 3 percent in the previous session. “We are currently seeing some profit-taking after Friday’s strong rally ahead of this week’s inventory data,” said Hans van Cleef, senior energy economist at ABN Amro. “Fresh uncertainty about inventories and OPEC compliance (with agreed production cuts) could be enough reason to sell some of the long positions.” U.S. hedge funds and money managers have already started lowering their bets on rising prices. Commodity Futures Trading Commission data showed on Friday that investors had cut bullish bets on U.S. crude for a second straight week. The world remains awash with oil despite a deal struck by some of the world’s biggest producers to rein in output. Rising U.S. production has been a major factor keeping supply and demand from balancing.

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