Brent crude futures were down 85 cents at $43.71 a barrel by 1443 GMT, having closed up 2 percent on Monday.
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Bart Melek, head of commodity strategy at TD Securities, said $40 a barrel has been a “tough support level” psychologically and in terms of technical trade.
USA futures fell 17 cents to $40.57 a barrel, after earlier falling toward $40, a key milestone for the oil market that once breached could see oil fall further, to lows not seen since 2009.
Pic:ReutersNEW YORK: Oil prices rose yesterday after strong losses last week, as Friday’s deadly attacks in Paris raised geopolitical tensions that some said could threaten global oil supply.
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The crude futures traded at $41.05/ barrel on the NY MEX went up by about 19 cents while crude oil traded on the ICE London futures at $44.56/barrel going up by about 40 cents during the trading session.
Money managers cut their net long U.S. crude futures and options positions to the lowest in three months during the week to November 10, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.
Crude oil stocks at Cushing rose by 1.5 million barrels, which is a sharper increase than anticipated but one which tallies nonetheless with the API survey.
Little has changed since Wednesday, when the U.S. Energy Information Administration reported U.S. crude supplies increased by 300,000 barrels last week.
Against this backdrop, crude oil will remain sluggish before the next OPEC meeting on December 4, and the lower the price is at that time, the more heated the discussions will be.
A narrower spread tends to encourage a greater flow of oil from overseas into the US market as crude grades that are pegged to the pricier Brent benchmark become more affordable. “Gains in demand have been outpaced by vigorous production from OPEC and resilient non-OPEC supply”.
The US Department of Energy will release its regular weekly oil inventories report on Wednesday.
Other analysts agreed oil prices would remain under pressure from fundamentals as production remains high despite slowing global economic growth.
Onshore inventories around the world have come close to being full, at the same time storage in offshore tankers requires oil prices on the end to be higher to prompt deliveries or storage would not be worth it.
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WTI options for December will expire on Tuesday.
