The oil market just hit a yellow light.
Crude’s advance of more than 90 percent from a 12-year low earlier this year has U.S. shale producers starting to return to their drilling rigs, threatening to slow further gains.
“The $50-to-$60 a barrel area is the sweet spot,” said Mark Watkins, the Park City, Utah-based regional investment manager for The Private Client Group of U.S. Bank, which oversees $128 billion of assets. “You start to have producers come back at $50, but a lot of them come in at $60.”
Money managers were cautious in the week ended June 7, betting more heavily on a price drop than on further gains, according to data from the Commodity Futures Trading Commission. West Texas Intermediate rose 2.6 percent to $50.36 a barrel on the New York Mercantile Exchange during the report week and fell 48 cents, or 1 percent, to $48.59 at 12:14 p.m. London time on Monday.