Oil prices fell to $49 area on Monday as Iraq increased target level of exports in anticipation of the OPEC meeting, while production in the Canadian oil sands region should recover from large-scale wildfires.
Attention turned to the OPEC meeting in Vienna this week, although most analysts do not expect any changes in the oil cartel.
Member countries could not agree on freezing production in an attempt to support prices while Iraq became another manufacturer in the Middle East which announced boosting export to 5 million b/day in June.
WTI Oil futures were traded at $ 49.29 a barrel, falling 0.1 percent at the close of London session.
Futures on Brent decreased 0.1 per cent to $ 49.27.
Impact on the quotes also had a strengthening US dollar on the background of rising expectations of an interest rate increase in the United States in the near future.
Crude short positions decreased to less than 60K in May versus 160K in the beginning of March when price was at $32/barrel, signaling markets make light of the possibility of collapse on the energy market:
However, trading volumes were limited due to public holidays in Britain and the United States, where Memorial Day, which is celebrated in Monday, is considered the beginning of the summer season, with rising demand on gasoline due to an increase in automotive traveling.
Vienna-based JBC Energy consulting company reported that global oil demand in the January-April 2016 year grew by 1.5 million barrels per day compared with the previous year, surpassing most forecasts thanks to strong consumption in the United States, China and India.
Oil production in the United States declined to a minimum since September 2014 year after the number of drilling rigs has dropped the ninth week of the last ten, despite the recent rally in oil prices.
Expected recovery of oil production in the Canadian oil sands region also had its pressure on WTI. Suncor Energy plans to increase production at its oil fields in Alberta this week after the suspension of works previously in may due to large forest fires.
Supply disruptions due to fires in Canada and unrest in Libya and Nigeria pushed oil to seven-months peaks in recent weeks.