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Oil declines as oversupply concerns linger

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TurboForex - Crude oil futures edged lower on Monday, as lingering concerns over a global supply glut weighed.

On the ICE Futures Exchange in London, Brent oil for August delivery shed 4 cents, or 0.06%, to trade at $64.60 a barrel during European morning hours.

On Friday, Brent futures lost $1.15, or 1.75%, to close at $64.64 amid concerns that higher output by Saudi Arabia would feed into a global supply glut.

Elsewhere, on the New York Mercantile Exchange, crude oil for August delivery dipped 13 cents, or 0.22%, to trade at $60.27 a barrel. Nymex oil prices dropped 81 cents, or 1.33%, on Friday to end at $59.96.

Industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. fell by 7 last week to 635. The drop marks the 27th straight week of declines.

Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $4.33 a barrel, compared to $4.68 by close of trade on Friday.

In the current market, the euro was under pressure after last ditch talks between Greece and its international creditors ended without an agreement on a cash-for-reforms deal on Sunday night.

Failure to strike a deal would result in Greece defaulting on payments and exiting the euro zone.

The dollar was supported as investors looked ahead to the outcome of Wednesday’s monetary policy meeting and rate statement by the Federal Reserve for a clear signal on when it could start to raise interest rates.

Recent economic reports have indicated that the U.S. economy was regaining strength after contracting in the first quarter, fuelling speculation that the U.S. central bank could raise rates as soon as September.

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