PHOTO
* Brent, WTI prices down by over 1.5 percent
* China fuel exports expected to soar later this year
* Specs cut long holdings, cash in on rally
(Updates throughout with comment, refreshes prices; changes dateline from SINGAPORE)
By Amanda Cooper
LONDON, Sept 12 (Reuters) - Oil fell on Monday after speculators last week cut their bullish bets by the most in three months and U.S. crude drillers added rigs for a tenth consecutive week.
Brent crude oil futures were down 53 cents to $47.48 a barrel by 0830 GMT, while U.S. West Texas Intermediate futures were off 66 cents at $45.22 a barrel.
Traders said the price falls on Monday and Friday were a result of increasing oil drilling activity in the United States, which indicated that producers can operate profitably around current price levels.
"The idea that we will continue to bounce off the $50 per barrel handle is proving correct," said Matt Stanley, fuel broker, Freight Investor Services (FIS) in Dubai, pointing to "the dynamic of shale oil" as the main factor pulling prices back down.
Oil's near six-percent price decline since Sept. 8 partly reverses a 10-percent rally seen early in the month to around $50 per barrel.
Adding to the pressure on the oil price, the dollar rose against the Australian dollar
AUD=D4
and most emerging-market currencies, as investors priced in a greater chance of U.S. interest rates rising next week, which forced up bond yields and dented the broader commodities complex.
"From that perspective, we're getting a bit of a sell-off in oil," CMC Markets strategist Jasper Lawler said.
"Given the good run that oil has had, that was maybe the easy trade to take when the dollar was rallying," he said.
When the dollar strengthens, non-U.S. investors tend to cash in on their dollar-denominated assets, such as crude oil.
This correlation was at its most negative in over a month on Monday, meaning the two are more likely to move inversely to one another than at any time since early August.
Expectations of another flood of refined product exports from China later this year added another negative note, as demand in Asia's biggest economy and oil consumer stutters.
Speculative oil traders were also less confident about prices, cutting their net long U.S. crude futures and options positions for a second consecutive week last week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Traders said they were still watching out for statements regarding a potential freezing of oil output levels, although a broad agreement to meaningfully rein in oversupply was not expected.
Even if exporters agree on freezing output around current levels, analysts said that would do little to raise prices as most exporters are pumping out oil at or near record high levels, and have adapted to do so at lower prices.
(Addtional reporting by Henning Gloystein in SINGAPORE and Osamu Tsukimori in TOKYO; editing by Will Hardy and Jason Neely) ((amanda.cooper@thomsonreuters.com; +442075423424; Reuters Messaging: amanda.cooper.thomsonreuters.com@reuters.net))
* China fuel exports expected to soar later this year
* Specs cut long holdings, cash in on rally
(Updates throughout with comment, refreshes prices; changes dateline from SINGAPORE)
By Amanda Cooper
LONDON, Sept 12 (Reuters) - Oil fell on Monday after speculators last week cut their bullish bets by the most in three months and U.S. crude drillers added rigs for a tenth consecutive week.
Brent crude oil futures were down 53 cents to $47.48 a barrel by 0830 GMT, while U.S. West Texas Intermediate futures were off 66 cents at $45.22 a barrel.
Traders said the price falls on Monday and Friday were a result of increasing oil drilling activity in the United States, which indicated that producers can operate profitably around current price levels.
"The idea that we will continue to bounce off the $50 per barrel handle is proving correct," said Matt Stanley, fuel broker, Freight Investor Services (FIS) in Dubai, pointing to "the dynamic of shale oil" as the main factor pulling prices back down.
Oil's near six-percent price decline since Sept. 8 partly reverses a 10-percent rally seen early in the month to around $50 per barrel.
Adding to the pressure on the oil price, the dollar rose against the Australian dollar
"From that perspective, we're getting a bit of a sell-off in oil," CMC Markets strategist Jasper Lawler said.
"Given the good run that oil has had, that was maybe the easy trade to take when the dollar was rallying," he said.
When the dollar strengthens, non-U.S. investors tend to cash in on their dollar-denominated assets, such as crude oil.
This correlation was at its most negative in over a month on Monday, meaning the two are more likely to move inversely to one another than at any time since early August.
Expectations of another flood of refined product exports from China later this year added another negative note, as demand in Asia's biggest economy and oil consumer stutters.
Speculative oil traders were also less confident about prices, cutting their net long U.S. crude futures and options positions for a second consecutive week last week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Traders said they were still watching out for statements regarding a potential freezing of oil output levels, although a broad agreement to meaningfully rein in oversupply was not expected.
Even if exporters agree on freezing output around current levels, analysts said that would do little to raise prices as most exporters are pumping out oil at or near record high levels, and have adapted to do so at lower prices.
(Addtional reporting by Henning Gloystein in SINGAPORE and Osamu Tsukimori in TOKYO; editing by Will Hardy and Jason Neely) ((amanda.cooper@thomsonreuters.com; +442075423424; Reuters Messaging: amanda.cooper.thomsonreuters.com@reuters.net))
