Oil eased on Monday on rising US borrowing costs and the prospect of further output rises after another increase in the weekly rig count, although the overall picture for crude remained bullish.
"Underlying sentiment is bullish ... we have got an important decision from (US President Donald) Trump coming up in May and we have OPEC potentially trying to ‘overtighten’ the market,” Saxo Bank senior manager Ole Hansen said. “(Fund managers) need a continuous flow of bullish news for their position to be maintained and this week, it’s not a matter of just watching the oil market.”
Broader financial markets were under pressure from the rise in US government yields towards 3 per cent, a level that in the past has triggered aggressive sell-offs in stocks, bonds and commodities.
Despite slipping on Monday, the oil market remains well supported, especially by strong demand in Asia.
Prices have risen by 25 per cent in the last year thanks to supply cuts led by the Organisation of the Petroleum Exporting Countries (OPEC) that were introduced in 2017 to prop up the market.