Hong Kong - Oil traded near $45 a barrel amid speculation US production may continue gains as drillers put rigs back to work.
Futures were little changed in New York, recouping an earlier loss of 0.6%. Companies added drill rigs for the sixth time in seven weeks through July 15, according to figures on Friday from Baker Hughes.
While data from the Energy Information Administration on Wednesday is forecast to show nationwide crude inventories declined by 2.1 million barrels last week, supplies will still be more than 100 million barrels above the five-year average.
Oil has traded between about $44 and $52 a barrel since early June after almost doubling from a 12-year low in February as a global glut shrinks amid supply disruptions and declining American output under pressure from OPEC’s policy of pumping without limits.
The price recovery will remain volatile and US drillers have used the rebound to place hedges and increase drilling, according to BMI Research.
"While demand does look relatively good coming out of the US, output might continue to rise if the price stabilizes in the $45 to $50 a barrel range," said David Lennox, an analyst at Fat Prophets in Sydney.
"Until there is some realistic action by OPEC to actually cut production, oil will struggle to rally."
West Texas Intermediate for August delivery, which expires on Wednesday, lost as much as 28 cents to $44.96 a barrel on the New York Mercantile Exchange and was at $45.26 at 8:10 a.m. London time.
The contract fell 71 cents to $45.24 on Monday. Total volume traded was about 40% below the 100-day average. The more-active September contract slid 2 cents to $45.92.
US stockpiles
Brent for September settlement was unchanged at $46.96 a barrel on the London-based ICE Futures Europe exchange. The contract on Monday lost 1.4% to $46.96 a barrel. The global benchmark traded at a premium of $1.05 to WTI for September.
US production rose by 57 000 barrels a day to 8.49 million a day through July 8, the first gain in five weeks, according to data from the EIA. Crude stockpiles dropped for an eighth week to 521.8 million barrels during the same period.
Oil-market news:
Workers are planning strikes that may affect production at some of Royal Dutch Shell fields in the North Sea. About 400 workers plan to stop work on July 26, the Unite union said in a statement.
A venture between Arab Petroleum Investment Corporation and National Shipping Company of Saudi Arabia will create the world’s largest fleet of oil tankers and support the kingdom’s plan to boost crude exports, Saudi Energy Minister Khalid Al-Falih said.