Crude oil futures fell for the second consecutive session on Monday, as concerns that U.S. shale production could rebound in the months ahead and a stronger U.S. dollar weighed.
Activity was likely to remain thin on Monday, as markets in the U.K., U.S. and Germany are all shut for public holidays.
On the New York Mercantile Exchange, crude oil for July delivery shed 47 cents, or 0.8%, to trade at $59.25 a barrel during European morning hours. Prices held in a range between $59.11 and $60.01.
On Friday, Nymex oil lost $1.00, or 1.65%, to end at $59.72 after data showed that the decline in U.S. drilling slowed down last week.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by only one last week to 659, marking the 24th straight week of declines.
Oil traders 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.
However, the rate of decline has slowed in recent weeks, fuelling concerns that some shale oil companies will dial up their output in the months ahead if prices stabilize near current levels.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% at 96.50 early Monday, the strongest level since April 28.
The greenback strengthened after Federal Reserve Chair Janet Yellen said on Friday that interest rates will be raised later in the year. After that, future rate hikes will be small and gradual over the next several years, Yellen added.
The dollar had also been boosted on Friday after stronger-than-expected U.S. inflation data supported the case for a rate hike later this year.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery dipped 23 cents, or 0.35%, to trade at $65.14 a barrel. Brent prices declined $1.17, or 1.76%, on Friday to close at $65.37.
The spread between the Brent and the WTI crude contracts stood at $5.89 a barrel early on Wednesday, compared to $5.65 by close of trade on Friday.
Concerns over the prospects of a Greek default continued to dominate market sentiment ahead of a critical June 5 deadline for Athens to reach a deal with its creditors.
Greece is scrambling to reach an agreement with its international lenders over economic reforms they say must be implemented before the final €7.2 billion tranche of the country’s €240 billion bailout is released.
The debt-strapped nation is due to make a €305 million payment to the International Monetary Fund on June 5, but will default if a deal is not reached by then.