Crude oil prices dipped early on Monday on expectations OPEC output would remain high after rising in May, stoking worries of oversupply despite declining U.S. rig operations. Crude oil prices jumped almost 5 percent on Friday, their biggest rally in over a month, as a bigger than expected drop in U.S. oil rigs in operation set off a renewed rush of bullish bets.
But prices eased on Monday due to near-record production in most oil-producing regions, especially the Middle East. Front-month Brent crude futures LCOc1 had fallen 51 cents to $65.05 (43 pounds) per barrel at 0129 GMT (2:29 a.m.) on Monday. U.S. crude futures CLc1 were down 52 cents at $59.78 a barrel.
Oil output by the Organisation of the Petroleum Exporting Countries (OPEC) likely hit a two-and-a-half year high of 31.22 million barrels per day (bpd) in May and production is not expected to be cut during a meeting of the group this Friday. U.S. bank Morgan Stanley said that prices could fall in the second half of the year, although it said it was unlikely they would drop back to their six-year lows from January.