Crude oil futures decline as investors weigh supply outlook

Investing.com - Oil futures resumed their decline on Monday, as market players continued to focus on a glut in global supplies.

On the New York Mercantile Exchange, crude oil for delivery in March shed 64 cents, or 1.29%, to trade at $48.50 a barrel during European morning hours.

Trade volumes were expected to remain light on Monday, with U.S. markets closed for a holiday.

On Friday, New York-traded oil futures surged $2.40, or 5.14%, to settle at $49.13 a barrel, as investors returned to the market to close out bets on lower prices.

WTI prices touched $44.20 on January 13, a level not seen since March 2009.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery declined 47 cents, or 0.93%, to trade at $49.71 a barrel.

London-traded Brent prices rallied $1.90, or 3.94%, on Friday, to close at $50.17 a barrel. Brent hit $45.19 on January 13, the weakest level since April 2009.

Friday's gains came as bullish comments made by the International Energy Agency helped ease concerns over a glut in global supplies.

The agency cut its forecast for the increase in non-OPEC oil supply this year by 350,000 barrels a day, amid indications lower prices had begun to curb output in some areas, including North America.

Additionally, industry research group Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. fell by 55 last week to 1,366, the lowest since October 2013.

The number of oil rigs has declined in 11 of the last 14 weeks since hitting an all-time high of 1,609 in mid-October.

London-traded Brent prices have fallen nearly 60% since June, when it climbed near $116, while WTI futures are down almost 58% from a recent peak of $107.50 in June.

Concerns over weakening global demand combined with indications that the Organization of the Petroleum Exporting Countries will not cut output to support oil markets have weighed on prices in recent months.

At the same time, increasing supplies of crude oil from North American shale formations have helped create a glut in world markets.

Meanwhile, the euro was close to recent lows against the dollar and the yen on Monday as investors waited to see if the European Central Bank would embark on an outright quantitative easing program on Thursday.

Last Thursday, the Swiss National Bank abandoned its three-year old 1.20 per euro exchange rate cap in a shock move, signaling that it expects the ECB to act this week.

The move roiled financial markets and saw the Swiss franc strengthen across the board.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped to 92.95.