Oil futures struggle for direction with global supplies in focus

Investing.com - Crude oil futures swung between small gains and losses on Monday, as investors focused on global supplies.

On the New York Mercantile Exchange, crude oil for June delivery dipped 5 cents, or 0.09%, to trade at $59.34 a barrel during European morning hours. Prices held in a tight range between $59.12 and $59.64.

On Friday, Nymex oil rose 45 cents, or 0.76%, to end at $59.39. New York-traded oil futures hit a five-month peak of $62.58 on May 6.

U.S. oil futures have been well-supported in recent weeks as an ongoing collapse in rigs drilling for oil in the U.S. added to expectations that shale oil production has peaked and may start falling in the coming months.

Industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. fell by 11 last week to 668, the 22nd straight week of declines and the lowest level since September 2010.

Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery inched down 8 cents, or 0.13%, to trade at $66.08 a barrel. Brent prices shed 15 cents, or 0.23%, on Friday to close at $65.39.

London-traded Brent futures rallied to a five-month high of $69.93 on May 6.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $6.74 a barrel, compared to $6.00 by close of trade on Friday.

Oil prices failed to get a boost despite China rolling out its third interest rate cut in six months over the weekend. The People's Bank of China lowered its benchmark interest rate to 5.10% from 5.35%, in order to spur economic activity and boost growth.

Greece and the euro zone were to hold a fresh round of talks later Monday as Athens scrambles to reach an agreement on a package of economic reforms in order to access fresh bailout funds.

Ahead of the talks, Greece’s government indicated that it was still hopeful that progress would be made, but euro zone officials have indicated that too many issues still remain unresolved.

Greece was due to repay approximately €770 to the International Monetary Fund on Tuesday.

Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.35% to hit 95.24 early on Monday.

The Labor Department reported Friday that the U.S. economy added 223,000 new jobs in April, just below expectations for jobs growth of 224,000. March’s figure was revised down to just 85,000 from a previously reported gain of 126,000.

The unemployment rate fell from 5.5% to a near seven-year low of 5.4% last month, broadly in line with forecasts.

The mixed data underlined speculation that the Federal Reserve may hold off raising interest rates in the immediate future. However, investors conceded that higher rates still remain on the horizon.

In the week ahead, investors will be focusing on Wednesday's U.S. retail sales report for April, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.