Investing.com -- Crude futures fell to one-month lows on Monday, as traders responded to a bearish note from BNP Paribas (PA:BNPP) on the increased likelihood that oil could retest yearly lows amid signals of mounting stockpiles worldwide.
On the New York Mercantile Exchange, WTI crude for May delivery traded in a broad range between $35.59 and $37.20 a barrel, before settling at $35.59, down 1.06 or 2.88% on the session. The front month contract for U.S. crude has closed lower in three straight sessions and five of the last seven. Last Friday, WTI crude tumbled more than 4% after officials from Saudi Arabia sent strong hints that it will resist any comprehensive agreement to freeze their production, unless Iran is part of the deal.
On the Intercontinental Exchange (ICE), brent crude for June delivery wavered between $37.61 and $38.92 a barrel, before closing at $37.76, down 0.91 or 2.35% on the trading day. North Brent Sea futures have closed lower in each of the last two sessions and six of the last eight.
Despite the recent downturn, both the international and U.S. domestic benchmarks of crude are up by more than 18% since falling to multi-year lows in mid-February.
On Monday, though, U.S. crude futures declined further after analysts at BNP Paribas suggested it "wouldn't be unreasonable," for oil prices to revisit 13-year lows earlier this year when WTI crude slumped to $26.05 a barrel on February 11. The prospect for continual gains in global inventories prompted the call, as stockpiles appear on pace for a 10th consecutive period of quarterly increases.
Last week, oil prices fell sharply after Saudi Arabia crown prince Mohammed Bin Salman asserted that the kingdom will resist any agreement to cap its output unless the pact is also signed by their Iranian rivals. Previously, Saudi Arabia, Russia and two other OPEC members were expected to freeze production at their respective January levels when the nations meet at a closely-watched meeting on April 17 in Doha. A freeze of Russian production could also be largely ineffective given that output in Russia reportedly remains near record-highs, above 11 million barrels per day.
Iran is hesitant to take part in any deal forcing it to limit production, as the Persian Gulf nation returns to global markets for the first time in nearly a decade. In March, Iran ramped up its production to 3.2 million bpd, less than two months after a host of Western Powers eased longstanding economic sanctions against the country following the completion of a comprehensive nuclear deal.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, was relatively flat in U.S. afternoon trading at 94.49, down 0.10% on the session. The index remains near five-month lows.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.