By Barani Krishnan
NEW YORK (Reuters) - Oil prices fell on Monday, hitting two-month lows, pressured by rising Canadian supplies, a higher U.S. oil rig count and cuts in bullish hedge fund bets on crude.
Hundreds of thousands of new barrels of crude have begun arriving in Alberta's oil sands region, crowding pipelines as producers recover from wildfires that crippled output two months ago.
The rising Canadian output pressured prices even though traders said data from market intelligence firm Genscape showed a drawdown of 488,625 barrels at the Cushing, Oklahoma delivery hub for U.S. crude futures during the week to July 8.
Also pressuring crude prices, data on Friday showed the U.S. oil rig count rose last week for the fifth time in six weeks. U.S. oil company bankruptcy filings in June hit their lowest for this year, data showed. Both factors suggested drillers were cranking out more crude.
Other data from Friday showed hedge funds cut bullish bets on U.S. crude to the lowest in four months.
Brent crude futures (LCOc1) were down 21 cents, or 0.5 percent, at $46.55 per barrel by 11:16 a.m. EDT (1616 London time) after sliding to a session low of $45.90, the lowest since May 11.
U.S. crude's West Texas Intermediate (WTI) futures (CLc1) slipped 26 cents, or 0.6 percent, to $45.36. During the session, WTI hit a two-month low of $44.53.
"We have shifted to a bearish trading stance and off of a neutral posture that we had maintained for approximately a month following transition from a bullish view in early June," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.
"We have suggested the likelihood of a price downdraft in WTI and Brent to about $37 and $38 areas, respectively."
Oil prices were down since trading began in Asia on Monday as refiners in that region cut back on crude orders due to worries of an economic slowdown.
Crude futures got a reprieve from session lows after Wall Street's S&P 500 index (SPX) hit a record high, reacting to a bullish U.S. monthly jobs report from Friday that boosted confidence in the economy. (N)
Crude also pared losses on a report that Nigeria's Trans-Niger pipeline, used for exporting Bonny light crude, had been shut for unknown reasons.