NEW YORK – Oil prices rose Monday in a technical rebound, after falling 5 percent last week amid soaring U.S. stockpiles and signs OPEC will keep output near 25-year highs.
"This rise (in crude) is technical, with a bit of short-covering," said Marshall Steeves of Refco Group. "The market outlook is still bearish near-term."
U.S. light sweet crude (search) for July delivery settled 51 cents higher, up more than 1 percent, at $49.16 a barrel on the New York Mercantile Exchange (search). London's Brent crude settled 34 cents higher at $48.37 a barrel.
A two-week slide has wiped 7 percent off prices and taken oil nearly $10 below its early April record high, as the dollar's rallve climbed more than 13 percent to their highest level in six years, pumped up by near-record OPEC production meant to create a bigger cushion for an expected jump in winter demand.
U.S. crude oil stocks rose 1.3 million barrels last week as a continued rise in imports added to a six-year high in supply, analysts forecasted in a survey on Monday. A fresh government weekly petroleum supply report will be issued on Wednesday morning.
The president of the Organization of the Petroleum Exporting Countries (search) said Friday that the cartel was content to allow prices to ease into the $40 to $45 range and saw no need to cut production when it next meets June 15.
"There is no need to trim, we will continue at this level," Sheikh Ahmad al-Fahd al-Sabah, also Kuwait's oil minister, told Reuters in an interview last Friday.
Qatar's oil minister warned on Monday that global oil inventories were piling up too quickly and urged OPEC producers to act with caution.
Abdullah al-Attiyah stopped short of saying the cartel would have to cut excess supply above its formal output ceiling, now running close to one million barrels per day (bpd).
"This is something we have to talk about at our next meeting," Attiyah told Reuters. "I'm concerned that stocks are building too quickly. We have to be very careful."
The oil minister of Venezuela, typically a price hawk, said at the weekend OPEC would have to consider cutting output.
Prices had eased earlier after European oil major Total said at the weekend that its five refineries in France halted by a strike would be back in operation by early on Monday.
Over the course of last week, Total had been forced to shut down plants that refine more than 900,000 barrels per day (bpd) of crude due to a strike over a public holiday, sparking worries of a squeeze on motor fuels ahead of the summer.
Total is the largest European exporter of gasoline to the United States, where demand spikes during the summer as drivers take to the roads for vacations. The driving season typically begins over the Memorial Day holiday, this weekend.