Oil prices little changed as bearishness lingers

Dec. 17 (UPI) -- Crude prices were slightly higher early Monday as they recovered only a small part of Friday's losses, as bearishness remained in part on concern about the market being potentially oversupplied.

As of 8:27 a.m. EST, West Texas Intermediate future prices rose 0.3 percent to $51.36 per barrel, while Brent crude oil prices were 0.6 percent higher to $60.62 per barrel.

"The broader outlook still looks bearish," Daily FX analyst Paul Robinson wrote in a Monday report. Speculators have been net sellers for 11 weeks in a row and their net-long position is the smallest in over two years, he added.

The crude oil market has shown weaknesses as traders have said they are concerned about the crude oil market being oversupplied.

The concerns were intensified on Nov. 5, after the United States granted waivers to several countries that buy Iranian crude oil. The United States had announced nuclear related sanctions against Iran in May, leading to concerns about potential supply disruptions. This caused oil prices to increase, reaching a peak for Brent on October 3 at over $86 per barrel.

Prices, however, have declined since October, in part after large crude oil producing nations like Saudi Arabia increased production, taking advantage of higher prices in the market as of early October.

After the waivers were announced in November, output increases in U.S. shale production led to record high production and any concern of potential disruptions quickly changed to concern that the market could be oversupplied.

WTI prices fell on Friday to $51.20 per barrel, compared with $52.58 per barrel on the close of the previous session, mirroring a decline in equities. This happened as the Dow Jones Industrial Average fell just over 2 percent on Friday to 24,100.51 points.

Traders have reported that there are also concerns that trade disputes between the world's two biggest economies, the U.S. and China, could result in reduced economic activity worldwide. This has led to reduction in the value of equity in several companies in recent months.

While the OPEC and non-OPEC nations agreed in early December to reduce production by 1.2 million barrels of crude oil per day starting in January, several traders have in recent days said that it remains to be seen whether they will be able to carry out their commitment.

In addition, others have said such a cut was in line with what the market had anticipated and it had likely been priced in already by the time the cut was announced.

The current Brent futures price is similar to the $60.06 per barrel at which it traded on December 6, before OPEC announced the oil production cut.