Oil down on continued concerns over US output

Traders work on the floor at the New York Stock Exchange in Manhattan New York

Oil steadied near $62 a barrel in NY after signs of economic strength in the US sent prices higher by the most in seven months on Friday.

The rising USA output comes largely on the back of onshore shale oil production. Prices were 0.4 percent lower Monday.

That has undercut some of the enthusiasm for oil, as investors weigh increased US supply against the likelihood that the Organization of the Petroleum Exporting Countries and non-OPEC producers will maintain supply cuts that have been in effect for more than a year. "We have monthly reports from the International Energy Agency and OPEC in the coming days to influence prices, but for now, crude is having a downbeat start to the week, unwinding some of Friday's effervescent rally".

Crude's rebound since past year is encouraging American drillers to pump even as they make efforts to be disciplined on spending, Patterson said.

ING's outlook is in contrast to bullish views from Royal Bank of Canada and Goldman Sachs Group Inc.to BMI Research and Societe Generale SA, which see prices supported as strong demand soaks up supply from the U.S. While Patterson does see healthy oil consumption, he said growth may slow and fail to completely absorb gaining American output. Total volume traded was about 34% below the 100-day average.

Brent crude futures LCOc1 slipped 54 cents, or 0.8 percent, to settle at $64.95 per barrel. The global benchmark traded at a $3.47 premium to May WTI.

American explorers cut the number of rigs drilling for oil by four, the first decline since mid-January, Baker Hughes data showed Friday.

The U.S. economy added the biggest number of jobs in more than 1-1/2 years in February, with non-farm payrolls jumping by 313,000 jobs last month, the Labor Department said on Friday.

Still, fears over increasing U.S. production continue to weigh on producers and investors.

It is not clear when the deal to withhold output will end, but Iranian oil minister Bijan Zanganeh said Opec could agree in June to begin easing current oil production curbs in 2019, the Wall Street Journal reported on Sunday.

Some of the market's fears were echoed in money managers' short-selling position.

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