Oil prices up for 3rd straight week

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Oil prices up for 3rd straight week

Continuing disruptions in the Libyan production output are likely to support and push oil prices up further to trade between US$50 to US$56 (S$70 to S$78) a barrel for WTI Crude and US$55 to US$60 for Brent Crude.

West Texas Intermediate, the USA benchmark for the price of oil, was down 0.2 percent to $53.07 per barrel.

Both benchmarks last week rose for a third consecutive week, with Brent adding 1.2 percent over the four days before the Good Friday holiday and WTI up 1.8 percent.

Increasing U.S. output is undermining attempts by the Organization of the Petroleum Exporting Countries and other major oil producers to curb output and sustain higher prices on oil market.

Trading is muted Monday as some markets remain idled because of the Easter holiday. The country was exempted from the initial agreement and allowed to increase its crude output to about 4 million barrels-the production level before Western sanctions were imposed on the country.

The subdued start to this week came as markets braced for more geopolitical tensions over North Korea, after its attempted launch on Sunday of a ballistic missile failed as the projectile blew up nearly immediately.

The bigger than expected drop by the headline index came amid a notable slowdown in new orders growth, as the new orders index plunged to 7.0 in April after jumping to a multi-year high of 21.3 in March.

US oil rig activity increased for the 14th straight week last week, the highest since April 2015.

Prices fell as much as 1% in overnight trading. Investors are also pouring money into the industry, suggesting USA output gains will continue. The latest indication is that OPEC may be willing to extend its output cut beyond the six months initially planned.

USA crude oil production has climbed to 9.24 million barrels per day, according to the latest Energy Information Administration data.

Oil declined below $US53 a barrel as the USA continued to ramp-up drilling, stoking fears the nation's surge in output this year will counter OPEC-led efforts to cut a global supply surplus.

The recovery in United States drilling activity is damping optimism that had sent prices above $US53 a barrel after some members of the Organisation of Petroleum Exporting Countries voiced support for prolonging production cuts with other nations beyond June. Official figures released Monday showed China's crude production slipped 6.8% on-year to 3.9 million barrels a day in the first quarter.

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